Accelerate Cash Flow Through Strategic Payment Term Optimisation

Amazon's standard payment terms (90-120 days) create significant working capital strain, forcing vendors to finance Amazon's inventory with their own cash or expensive credit facilities. Each 30-day reduction in payment terms improves cash flow equivalent to 8-10% of annual revenue money that can fund growth, reduce debt, or improve profitability. Without strategic negotiation, vendors accept extended payment cycles as unavoidable, missing opportunities to accelerate cash conversion and reduce financing costs.

Our Payment Terms Improvement service provides expert negotiation strategies specifically focused on accelerating payment cycles. We leverage your performance history, growth trajectory, and category positioning to secure shorter payment terms, early payment discounts, and favorable remittance structures that dramatically improve working capital and reduce the financing burden of vendor relationships.

Key Takeaways

Cash Flow Impact: Every 10-day reduction in payment terms equals approximately 3% of annual revenue in improved cash flow often hundreds of thousands or millions of pounds.

Negotiation Leverage: Strong operational performance, consistent growth, and category importance provide concrete leverage for payment term improvements.

Early Payment Options: Even without base term changes, early payment discount programs (2/10 net 90) can effectively reduce average payment cycles by 15-25 days.

Competitive Advantage: Better payment terms than competitors provide working capital advantages enabling faster growth and higher profitability.

Compounding Benefits: Improved cash flow reduces financing costs, enables inventory investment, and creates virtuous cycles of growth acceleration.

The Problem: Extended Payment Cycles Draining Cash

Accepting 90-120 Day Terms

Most vendors view extended payment as standard Amazon practice without realizing shorter terms are achievable through strategic negotiation.

Working Capital Strain

Extended payment cycles require vendors to carry 3-4 months of inventory investment before receiving payment, creating cash flow pressure especially during growth.

Expensive Financing

To fund Amazon inventory, vendors resort to lines of credit, factoring, or expensive short-term financing costs that directly reduce profitability.

Growth Constraints

Poor cash flow from extended terms limits ability to fund inventory growth, launch new products, or invest in marketing constraining overall business growth.

Our Process

1. Cash Flow Analysis & Impact Modeling

Quantify current working capital impact of payment terms and model financial benefits of various term improvement scenarios.

2. Leverage Assessment & Development

Identify negotiation leverage based on sales volume, growth rate, operational excellence, payment consistency, and strategic category importance.

3. Term Improvement Strategy

Develop multi-faceted approach including base term reduction, early payment discount programs, and performance-based improvement frameworks.

4. Negotiation Execution & Documentation

Expert representation in payment term discussions, securing optimal terms and ensuring proper documentation and system implementation.

5. Ongoing Monitoring & Optimisation

Track actual payment performance against negotiated terms and identify opportunities for further improvement as relationship scales.

Why Choose RT7 for Payment Terms Negotiation?

We've successfully negotiated payment term improvements for hundreds of vendors, achieving average reductions of 20-30 days in payment cycles. For a £5M annual vendor, a 30-day improvement delivers £400K+ in improved working capital—money immediately available for growth, debt reduction, or profitability improvement. Our negotiation strategies combine financial modeling, leverage development, and proven frameworks that consistently deliver results.