Credit Terms Comparison Worksheet
Different customers and suppliers offer or request different terms — this worksheet lays them side by side so you can compare the true cost and risk, not just the headline days.
What's included
- A side-by-side worksheet for comparing terms
- The factors beyond the payment period that matter
- How to weigh terms against cash-flow impact
- Where it helps in setting or accepting terms
5 min read
Why compare terms deliberately
'30 days' from one party is not the same as '30 days' from another once you factor in early-payment discounts, interest on overdue, stop-supply rights and how reliably each pays or is paid. Laying the terms side by side stops you from anchoring on the headline payment period and missing the clauses that actually affect your cash and risk.
Use the worksheet for comparing what to offer different customer tiers, or for choosing between suppliers.
The comparison worksheet
- Option A vs Option B
- (customer tier, or supplier)
- Payment period
- A: ______ days B: ______ days
- Early-payment discount
- A: ______ B: ______
- Interest on overdue
- A: ______ % B: ______ %
- Recovery costs recoverable?
- A: [ ] B: [ ]
- Stop-supply right
- A: [ ] B: [ ]
- Guarantee / security
- A: ______ B: ______
- Typical reliability
- A: ______ B: ______
- Cash-flow impact
- A: ______ B: ______
- Preferred option
- __________ Reason: __________
How to use it
When you are deciding what terms to offer a customer tier, fill a column per option and compare the whole picture, not just the days. Shorter terms with weak overdue clauses can be riskier than slightly longer terms that let you charge interest and recover costs. Model the cash-flow impact of each with the Merion tools.
Once you have chosen, lock the winning terms into your terms of trade so they apply consistently.
This is general business information, not legal advice.
Tips
- Compare the whole terms picture, not just the headline payment period.
- Interest and recovery-cost clauses can matter more than a few days' terms.
- Weigh each option's cash-flow impact before you decide.
- Lock the chosen terms into your terms of trade for consistency.
FAQ
Are shorter terms always better?
Not necessarily. Slightly longer terms with strong overdue interest and recovery clauses can leave you better protected than short terms with weak clauses.
How do I compare reliability?
Use payment history and references — a party that pays a day late every time is effectively on longer terms than stated.
Where do I use this?
When deciding what terms to offer customer tiers, or when choosing between suppliers competing for your business.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.