When selling to larger enterprises, particularly high-value company-wide licenses, it's also often worth having a section in there defining who the customer is for the purposes of the agreement. (Do wholly or partially owned subsidiaries generally [or by express permission] get access? What about their subcontractors/joint-ventures/acquisitions?)
I'd be surprised if many larger enterprises agreed to 30 day payment terms and a late payment penalty clause - particularly one with interest compounding monthly - since they regularly take more than 30 days to pay invoices
(the standard hack is to offer a reduction for payment within a certain time frame instead)
If I were the customer I'd also be extremely reticent about signing a contract which gives the vendor the right to increase the renewal rate thirty days ahead and also obliges me to automatically renew for the next period if I don't give thirty days notice. That could be an expensive decision to make in the space of an afternoon...
But, as a small company/start-up you should absolutely stand firm on 30 day payment, 45 at the most. It's completely ludicrous that large companies cannot pay in reasonable time-frames - it's just bullying, and is only done so that the large company can conserve cash. Most small businesses fail because of cash, and failure to pay by large customers is a big reason they get overstretched.
Businesses do annual budgets. Try to push a 30-day notice of price changes at my employer, and we would kick you out or get painful concessions immediately. Ditto with auto-renewal.
These are consumer gym membership-like terms, I'm really surprised anyone gets good results with this doc as it stands.
Comments
When selling to larger enterprises, particularly high-value company-wide licenses, it's also often worth having a section in there defining who the customer is for the purposes of the agreement. (Do wholly or partially owned subsidiaries generally [or by express permission] get access? What about their subcontractors/joint-ventures/acquisitions?)
I'd be surprised if many larger enterprises agreed to 30 day payment terms and a late payment penalty clause - particularly one with interest compounding monthly - since they regularly take more than 30 days to pay invoices (the standard hack is to offer a reduction for payment within a certain time frame instead)
If I were the customer I'd also be extremely reticent about signing a contract which gives the vendor the right to increase the renewal rate thirty days ahead and also obliges me to automatically renew for the next period if I don't give thirty days notice. That could be an expensive decision to make in the space of an afternoon...
But, as a small company/start-up you should absolutely stand firm on 30 day payment, 45 at the most. It's completely ludicrous that large companies cannot pay in reasonable time-frames - it's just bullying, and is only done so that the large company can conserve cash. Most small businesses fail because of cash, and failure to pay by large customers is a big reason they get overstretched.
Yeah, I chuckled when I saw those clauses too.
Businesses do annual budgets. Try to push a 30-day notice of price changes at my employer, and we would kick you out or get painful concessions immediately. Ditto with auto-renewal.
These are consumer gym membership-like terms, I'm really surprised anyone gets good results with this doc as it stands.