Compare payment terms alongside supplier prices

Two quotations with the same product price can impose different cash-flow and performance risks. Payment timing, deposit conditions and the evidence required before a balance is due should be visible in the comparison. Avoid treating a payment term as a technical product attribute.

Define the requirement

Ask each supplier to state proposed deposit, milestone and final-payment triggers in plain language. Identify what document or inspection event demonstrates that a milestone has been reached. Keep payment account verification as a separate controlled process before any transfer.

Questions to send with the RFQ

Request clarification if a term says only “balance before shipping” without defining inspection or shipping evidence. Ask whether samples, tooling and freight are paid on the same schedule or separately. Negotiation may change the terms, so record the quoted version and each revision.

Review the answer

Assess the timing and amount at risk, not just the nominal unit price. A buyer should not accept an unfamiliar account change by email alone. Financial commitments and transfers require authorised human review; an RFQ comparison is preparation for that decision.

An example to adapt

For a hypothetical custom box, one supplier may request a tooling deposit and product balance after inspection, while another requests full payment before production. The price difference is only one part of the commercial comparison.

Decision before sending

Before discussing a deposit, decide who in the buying organisation can approve the exposure and what evidence that person needs. A sourcing analyst can organise the terms but should not imply a payment is authorised. If a supplier proposes a milestone, describe the deliverable attached to it: accepted drawing, tested sample or inspected goods. When account details are supplied, verify them through an established independent channel. Price, performance and payment risk should reach the authorised reviewer together.

Source context

The U.S. Commercial Service payment guide describes several international payment methods and the different timing risks they create. Compare the deposit, milestone and balance schedule next to price so an attractive unit rate does not hide a payment pattern the buyer cannot accept.