I recently wrote a post for IT Jungle on auditing and reducing IBM i 3rd party yearly software maintenance costs.
In that article, I listed nine steps for determining whether a vendor’s yearly software maintenance cost is fair and how to ask for a reduction.
A simple tenth step is to look for and ask for an early payment discount.
Some vendors still offer discounts if you pay your bill on time or early. You may be able to score a modest discount of 1-2% by paying your invoice quickly.
Sometimes you’ll see this discount encoded in the invoice, where you’ll see something like this listed in the terms box.
2% 10 net 30
The 2% refers to the discount the vendor is offering (discount rate). The 10 refers to the discount period (in days) you have to take advantage of the discount (discount period). And net 30 refers to the number of days before the entire bill without discount is due (credit period).
In this case, 2% 10 net 30 means you can take a 2% discount if you pay the bill within 10 days, otherwise the balance is due in 30 days.
This discount may vary but it’s worth looking for if only to chip off a small piece of your maintenance cost.
You can go even further and approach the vendor for a bigger discount. You can do this by auditing your software maintenance bills as I outlined in my article and look for any bills that are due in the next few months.
Call the vendors on these upcoming bills and ask them for a discount if you pay the bill early. Sometimes the vendors will offer discounts if they are able to get their money in advance. I know of one IBM i vendor who routinely gives me a 20 percent discount if I pay the bill on time or early. I wouldn’t have know that or got that discount if I just waited for the bill to come in and routinely paid it.
Asking for discounts doesn’t always work, but looking for and asking for early payment discounts can help you trim your yearly software maintenance budget. And it doesn’t hurt to ask.
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