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Pricing & deals
Payment terms in deals
Annual up front, quarterly, monthly, net 30, net 60 — the billing and payment terms in a contract, which decide when the cash arrives and how much working capital the deal consumes.
Owned by: Senior sales analystTest band: Senior sales analyst
In practice
A discount for annual-up-front payment is often cheaper than the working capital of monthly billing. Give reps a rule: 5% for annual up front, nothing for monthly.
The kind of thing the test asks
- A customer asks for monthly billing instead of annual up front on a $120k deal. The cost to the business is roughly…