Question

A buying committee has given the Purchasing Officer authority to buy from you but with a special condition stipulating 60-day payment terms. Your company's standard terms of credit are 14 days. The potential business is significant, and you are offered the written order on the spot but subject to you accepting the extended credit terms. You would:

a) Accept the extended credit terms to secure the order.
b) Refuse the order due to the extended credit terms.
c) Suggest a compromise on the payment terms.
d) Ignore the credit terms and accept the order.

Answer 1

In this scenario, it is advisable to suggest a compromise on the payment terms.

Step-by-step explanation:

In this scenario, the purchasing officer has been granted authority to buy from your company with the condition of 60-day payment terms, which is longer than your company's standard 14-day credit terms. The potential business is significant, and you are offered the written order on the spot, but subject to accepting the extended credit terms.

In this situation, it would be advisable to suggest a compromise on the payment terms. You can propose a payment term that falls between the 14-day standard and the 60-day stipulation, which can help secure the order without putting a strain on your company's cash flow.