Things You'll Need:
- Invoice statements
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Step 1
Contact three different service providers to get a quote on the items and services you need. Ask them about their payment options and fees they charge to businesses when using trade credit lines.
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Step 2
Compare the quotes and fees from one provider to another. Review cautiously the rates charged on invoices on a 30, 60 and 90 day spectrum. These rates can vary considerably, so it is best to go with the lowest rate provider.
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Step 3
Select the merchant with the lowest rates for your trade credit lines. Put that information in one pile and move on to contacting the other two competitors.
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Step 4
Contact the other competitors for your items or services. Let them know you have a quote from a service provider and disclose the terms and fees. See if you are successful in getting the service providers to be competitive and determine if they can beat the rates you received from the service provider charging you the least amount.
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Step 5
Complete negotiations with the three vendors. Select the least expensive vendor and complete the transaction for your product or service required. Repeat this process for each vendor that you do business with to negotiate the best rate.
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Step 1
Review your invoice statements for your credit trade lines each month. To calculate your rate of interest the vendor is charging you, you will need to begin with the total amount of the transaction. For this example, we will use computer equipment purchases totaling $6,000.
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Step 2
Begin by creating a spreadsheet for that vendor. In the first column place the total amount of the transaction, which is $6,000.
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Step 3
Review the invoice statement. Subtract your initial payment to the vendor from the $6,000 total. For this example, we will say that your initial payment was 25% of the total purchase price. The calculation will look like this: $6,000 - 25% = $4,500.
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Step 4
Use the balance that you came up with in step 3 to begin determining your rate. Review the invoice statement and look to see what the rate of interest is on the account after 30 days. For this example we will say the rate you are being charged is $225.00 for a balance over 30 days. Your calculation will look like this: $225.00 / $4,500 x 100 = 5%. This is your current rate on the trade line.
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Step 5
Repeat this step for all of your business trade lines in order to find the rate of interest. Paying off balances due in less than 30 days can reduce or eliminate your rate, so make sure you factor that in to any rate calculation.
