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The key to good business credit is paying on time. It is critical to have cash available when your bills are due. As we all know, cash flow can be unpredictable and erratic at times. Therefore, negotiate terms with suppliers/vendors to give yourself room to be able to meet the obligations.
When you first negotiate terms, you usually don’t have a lot of leverage, so you take the standard terms. But if you never ask, you won’t get better terms. If your supplier requires 10-day terms, don’t be afraid to push bask and ask for 15 or 30 days.
Those extra days can make a huge difference in terms of being able to pay on time. When you do have leverage, and you are a big source of revenue for your supplier, you’re in a strong position to negotiate terms that are good for you.
If you look at the general marketplace, large corporations get the best terms and dictate when they will pay. Sometimes, they even require a discount if they pay on time! Clearly if you have some volume and regular purchasing history, you’re in a very good position to push on terms (i.e., 60 to 90-day terms).
The best way to maintain good business credit is to never get a stain in the first place. Repairing bad credit is a tough game. Maintain your business credit by ensuring you have terms with your suppliers you can live with, so they never have cause to report you for paying late.