What is the purpose of 30 days credit term ?

Question

Why does it take 4-6 weeks for me to receive cheque from client ?

Answer 1

The purpose is to facilitate getting business. Often businesses require invoices to pay money out. I know I get this all the time at my job. They then need to match it against a Purchase Order they've prepared. Basically, there are a lot of controls designed to stop fraud within a company. The 30 days credit gives the businesses time to process the payment from time of sale.

I'm sure this isn't how the 30 days originated. I'm sure it originated to gain business by making the purchasing process easier for customers. However, since it is standard, most businesses have a payment system designed for it.

On those rare ocassions my company demands prepayment, it is always a hassle, with us having to book orders, prepare invoices, but withhold shipment until payment received.

Answer 2

Thats how some business operate if you sell them a product they go ahead and sell that for cash and use your money for 4-6 weeks to buy other products and make more money : ) by not using a single dime of thier own money
or
maybe they get money from their clients in 4-6 weeks depends..