Here's a deal dimension that almost nobody leads with and almost everyone should. In our dataset of roughly 2,000 supplier agreements across pilot customers and benchmark partners, the median payment term sits at Net-35. The weighted mean, after adjusting for contract size, is closer to Net-38. The modal term is still Net-30, but there's a long tail — a meaningful 22% of contracts sit at Net-45 or longer.

The benchmark matters because payment terms are one of the few concessions in an enterprise contract where the buyer can often extract real value without the supplier feeling meaningful pain. The economics are asymmetric in a way that few other dimensions are. Understanding the asymmetry is how you ask for terms credibly.

Why the asymmetry exists

Payment terms are, mathematically, a short-term loan from the supplier to the buyer. If the supplier's cost of capital is 6% and the buyer pushes from Net-30 to Net-45, the buyer has extracted the equivalent of about 0.25% of the contract value as a financing benefit, per year. That's modest for the supplier. But the effect is not symmetric.

A buyer with $500M of annual supplier spend who moves the average payment term from 30 to 45 days has freed up approximately $20M of working capital on a permanent basis. That's a one-time cash release of $20M, plus a structural reduction in the working-capital requirements of the business going forward. At a 6% cost of capital, that's $1.2M of recurring value per year. At a 10% cost of capital — which is roughly where most operating companies sit when you account for equity — it's $2M per year, recurring.

The supplier experiences a pro-rata fraction of the same number. The buyer experiences it in aggregate. For the buyer, this is a meaningful financial line item. For the supplier, on any single contract, it's a rounding error. That's the asymmetry, and it's why payment terms are usually the first thing a good CFO asks procurement to move on.

Payment terms are the rare concession where the ask is small to the counterparty, large to the asker, and almost always negotiable.

Why it doesn't happen more often

Given the economics, you'd expect payment terms to be a first-class negotiation lever. They usually aren't. A few reasons.

First, the person negotiating the contract is often not the person who feels the working-capital benefit. A category manager is measured on savings against budget, not on days-payable-outstanding. The finance team feels the DPO. The category manager doesn't. So the lever doesn't get pulled, or gets pulled as an afterthought.

Second, payment terms are socially awkward to ask for. Price concessions have a narrative — "we're under pressure on budget," "our benchmarks suggest lower" — that feels professional. Asking for longer payment terms can feel, to the negotiator, like admitting a cashflow problem. It isn't. It's treasury management. But the social discomfort is real, and it stops the ask from happening.

Third, the ask tends to arrive late in the negotiation, after the price has been locked. By that point, the supplier has spent their concession budget and is in no mood to give up more. Payment terms should be raised early, often as an explicit trade against a slightly higher price, rather than late as a give-back.

How to ask credibly

Four techniques work better than we'd have guessed, based on pilot data.

Benchmark transparently. "Our current weighted-average term across the category is 38 days. We'd like this contract to be at or above that benchmark." This is an internal-facts framing. It doesn't claim anything about the supplier. It claims something about you. Suppliers find it hard to argue against, and it lands as professional rather than aggressive.

Trade for it. "We're willing to commit to an additional six months of term length in exchange for Net-45." Term length has real value to the supplier's forecasting and compensation cycle. Six months of extra commitment is often worth more to them than a small extension of payment terms. This is the trade that almost always works if you can offer it.

Anchor on a table, not a number. If you show up with a graduated table — "Net-30 at the current price; Net-45 at a 1.5% discount; Net-60 at a 2.5% discount" — you've reframed the conversation from "can we do this" to "which of these would you prefer." This works in roughly 70% of the cases where we've tested it.

Put it in the RFP, not the renewal. Payment terms are much easier to set at the start of a relationship than to change midway. If you're running any RFP, put the payment terms you want into the template, not as a variable. Suppliers bid against what the RFP asks for. If the RFP asks for Net-45, many will simply price to Net-45.

The supplier-health counterweight

One caveat that gets under-discussed: pushing payment terms aggressively on small or financially fragile suppliers is, in some cases, actively harmful. A mid-sized supplier with thin margins and limited working capital can be pushed into a liquidity problem by an extension that a larger supplier would absorb without noticing. Responsible procurement has a line here.

The line, as best we can specify it: don't push payment terms beyond what the supplier's larger customers are already receiving. If you're a 5% account and their biggest customer already has Net-45, you can ask for Net-45 with a clean conscience. If you're a 30% account and you'd be setting their longest terms by 15 days, you're asking for something different, and you should know it. The numbers change the ethics.

A fair heuristic we use internally: payment-term asks should be indexed to the supplier's largest customer's terms, not to a theoretical maximum. This keeps the ask aggressive enough to capture real value without creating counterparty-risk problems down the road.

The 35-day benchmark

Back to the headline number. If your weighted-average supplier payment term is below 35 days, you're behind the benchmark and have room to move. If you're at 35 to 40, you're around market. If you're north of 40, you're ahead of most peers, and the marginal days are harder to extract — though not impossible, and the economics of moving from 40 to 45 are still large in absolute terms.

For most teams we work with, the first-year goal of moving the weighted average from wherever it is to 35 or above produces more measured value than any single price-concession program run in the same period. Not because price doesn't matter. Because payment terms are underpriced as a lever, relative to the effort required to move them.

Ask. It's a short conversation, it's often winnable, and the number it produces compounds quietly for years.

— The Whispor team