Down payments and payment terms in wholesale: how to finance your season

A collection is designed, produced and paid for long before the store sells it. Between the order taken at a trade show and the collection of the balance, a brand often finances several months of fabric, manufacturing and transport. Payment terms therefore decide whether the season can be financed, and their place at the bottom of the terms of sale says nothing about how much they weigh. To build them, separate two things: what French law sets, which applies to everyone, and what belongs to your commercial policy, which you can adjust customer by customer.

Without late payment, SMEs would have €13 billion more in cash

Late payment is part of the landscape. According to the 2025 report of the French Payment Terms Observatory, published by the Banque de France in September 2026, the average payment delay of French companies stood at 13.4 days at the end of 2025, slightly above the European average. The same report estimates that, without these delays, SMEs and micro-enterprises would have had €13 billion of additional cash.

The size of the customer guarantees nothing. According to the same report, fewer than one large company in two pays its suppliers within the 60-day legal limit. A brand that sells to both independent stores and department stores must therefore think through its payment terms account by account, rather than rely on a general clause sent out once a year.

Down payment or forfeitable deposit: what difference does it make to a brand?

Both words refer to a sum paid with the order, but their legal effects are opposite. Under French law, “arrhes” are a way out: under Article 1590 of the French Civil Code, the party who paid them can cancel the sale by forfeiting them, and the party who received them can cancel by paying back double. A down payment (“acompte”) is a first instalment on a firm sale: it gives no one the right to withdraw.

Take a store that pays €3,000 with its order, then changes its mind before delivery. If the order form says “arrhes”, it loses the €3,000 and walks away, even though the brand may already have started producing its pieces. If the form says “down payment”, the store remains bound to pay for the whole order.

So write “down payment” on the order form, in the general terms of sale and on the invoice, stating its percentage and the date on which it falls due.

Wholesale payment terms: what the French Commercial Code sets

The French Commercial Code regulates payment terms between companies, and these rules are mandatory: a contract cannot extend them. Article L441-10 sets four benchmarks:

• Failing agreement between the parties, the term is 30 days after receipt of the goods.
• The agreed term cannot exceed 60 days from the invoice issue date.
• By way of exception, 45 days end of month is possible, provided it is expressly stipulated in the contract and is not manifestly abusive towards the creditor.
• Late-payment interest is due without any reminder being necessary; it comes on top of a fixed fee for recovery costs, set at €40 by Article D441-5.

The interest rate is set in your general terms. Failing that, it is the European Central Bank refinancing rate plus 10 percentage points, and it cannot be lower than three times the French statutory interest rate. The DGCCRF, the French consumer and competition authority, checks compliance with these terms: the administrative fine can reach €2 million for a legal entity.

Some sectors have specific terms and the texts change. Before drafting or revising your terms, check the version in force on Légifrance or with the DGCCRF.

Building a schedule: down payment, balance, due date

Most brands combine a down payment with the order and a balance paid on delivery or at a due date. The down payment finances part of the fabric purchases and commits the customer; the balance follows shipment. The percentage is decided like a minimum order: from your real costs, not from a practice heard from another brand. A worked example:

• An order of €10,000 excl. VAT with a 30% down payment: €3,000 excl. VAT is due on signature.
• The balance of €7,000 excl. VAT is invoiced on shipment, on 15 March.
• With a term of 60 days from the invoice issue date, payment falls due on 14 May.

Between the signature at the trade show and 14 May, the brand will often have paid its fabric suppliers and its workshop: the down payment has to bridge that gap. And if this customer pays with the average delay recorded by the Banque de France, 13.4 days, the €7,000 only arrives towards the end of May. The schedule is prepared at the show itself, where most orders are signed: the method is set out in our guide to preparing a trade show and its order taking.

Early payment discount: a cost to measure

An early payment discount is a reduction granted to customers who pay before the due date, for example 2% for payment within ten days. On a balance of €7,000 excl. VAT, it amounts to €140. It speeds up collection, but it has a price, which should be compared with that of short-term financing.

The arithmetic is simple. If the customer pays at 10 days instead of 60, the brand pays 2% for 50 days of advance, roughly 14.6% on an annual basis (2% × 365 ÷ 50). An overdraft or a credit line may cost less.

In France, the invoice must state the applicable discount terms (Article L441-9 of the French Commercial Code). Many brands simply write “no discount for early payment”.

Write the terms where the customer commits

Payment terms that only appear in a document sent once a year protect no one. They must appear on the order form the customer approves, with five items:

• the down payment rate;
• the payment method;
• the due date of the balance;
• the late-payment interest rate;
• the fixed recovery fee.

Electronic signature of the order form ties these terms to the customer’s agreement, which makes any later reminder simpler.

Which payment terms for which customer profile?

One rule for everyone is simple, but rarely fair. If you sell through sales agents, give them the grid in writing: they are the ones who announce the terms in appointments, and an agent who improvises a payment term commits the brand.

• First order: a higher down payment, or even full payment before shipment, until you know how the customer pays.
• Long-standing account with a good payment record: a reduced down payment and payment at the due date, within legal limits.
• Customer late on the previous season: balance required before the in-season reorder ships.
• Export: payment terms also depend on the law governing the contract and on the customer’s country (see selling wholesale abroad).

Securing an export payment

Within the European Union, Directive 2011/7/EU also sets a standard term of 60 days between businesses, unless expressly agreed otherwise and not grossly unfair, and a minimum fixed fee of €40 for recovery costs (see EU and US wholesale rules). In September 2023 the European Commission proposed replacing it with a stricter regulation; the European Parliament adopted its position in April 2024, but member states have not reached agreement in the Council. As of October 2026 the proposal is still pending and the directive remains the applicable text. Outside the Union, or with an unknown customer, three tools complement the down payment.

Chasing a late payment without damaging the relationship

Chasing works when it follows a rhythm known in advance, which the customer ends up anticipating. Four steps are enough:

1. A courteous reminder a few days before the due date, with the invoice attached.
2. A follow-up the day after the due date, restating the amount and the date.
3. A call from the salesperson or agent who handles the account, then a written reminder mentioning the agreed interest and recovery fee.
4. As a last resort, a formal notice and a freeze on new shipments until the balance is paid.

The five mistakes that delay collection

1. Calling it a forfeitable deposit when you mean a down payment, and so giving the customer a way out.
2. Forgetting to state the interest rate and the €40 fee in the general terms and on invoices.
3. Granting payment terms verbally that no one can trace afterwards.
4. Shipping a reorder to a customer who has not paid for the previous season.
5. Chasing too late, once the delay has set in.

Before the next campaign, in this order

First, reread your general terms, order forms and invoices: the words “down payment”, the interest rate and the €40 fee must appear on all three. Next, set your grid by customer profile (first order, long-standing account, late payer, export) and hand it to your agents in writing before the show. Finally, align the reminder calendar with the due dates, so that the first reminder goes out before the date, not after. The terms used here are explained in our wholesale glossary.