Payment Terms & Methods in Commercial Furniture

Common Payment Methods

Commercial furniture dealers accept a variety of payment methods, though not all methods are available for every transaction:

• Bank Wire / EFT (Electronic Funds Transfer) — The preferred method for large orders. Wire transfers are fast, secure, and avoid credit card processing fees. Your dealer will provide routing and account details on the invoice.
• Credit Card — Accepted by most dealers for smaller orders. For larger purchases, dealers may cap credit card payments or add a processing surcharge (typically 2-3%) because of the fees they incur.
• Purchase Orders (POs) — Standard in government, education, and enterprise purchasing. A PO is a formal commitment to pay, issued by the buyer's procurement department. Dealers typically require credit approval before accepting POs from new customers.
• Check — Still accepted but increasingly uncommon. Checks slow down order processing because dealers often wait for funds to clear before releasing an order to the manufacturer.

Deposit Structures

Most commercial furniture orders require a deposit before the dealer releases the order to the manufacturer. The standard structure is:

• 50% deposit at order — Due when the purchase order or sales agreement is signed
• 50% balance on delivery — Due upon delivery and installation, or net terms from the invoice date

Some variations you may encounter:

• 100% prepayment — Common for small orders, quick-ship items, or first-time customers without established credit
• Progress payments — For very large projects (six figures and above), payments may be structured in thirds: at order, at shipment, and at installation completion
• No deposit — Rare, but some dealers extend this to long-standing customers with strong credit histories

Net Terms

Net terms define how many days after invoicing the buyer has to make payment:

• Net 30 — Payment due 30 days from the invoice date. This is the most common term for established accounts.
• Net 45 or Net 60 — Extended terms sometimes available for government entities, large enterprises, or high-volume accounts. Your dealer may need to apply for extended terms with the manufacturer on your behalf.

Dealers typically run a credit check or request trade references before extending net terms. If your organization is new to commercial furniture purchasing, expect to pay a deposit or prepay until you establish a payment history.

Leasing Options

Leasing allows you to spread the cost of furniture over 3 to 5 years, preserving capital and treating the expense as an operating cost rather than a capital expenditure. Commercial furniture leasing works similarly to equipment leasing:

• A leasing company pays the dealer in full at the time of order
• Your organization makes monthly payments to the leasing company
• At the end of the lease, you may have a buyout option (often $1 or fair market value)

Your dealer can typically connect you with leasing partners or you can arrange financing independently through your bank or a commercial leasing company.

Tax Considerations

Sales tax on commercial furniture varies significantly by state and by buyer type. Government agencies, educational institutions, and certain nonprofits are often exempt from sales tax but must provide a valid tax exemption certificate at the time of order. Your dealer cannot retroactively remove sales tax once an invoice has been paid.

For multi-state projects, tax is typically charged based on the delivery destination, not the dealer's location. If you're furnishing offices in multiple states, expect line-item tax variations on your invoice.

What to Expect on an Invoice

A commercial furniture invoice will typically include:

• Itemized product list with manufacturer, model, finish, and quantity
• Unit pricing and extended pricing
• Freight and delivery charges (sometimes bundled, sometimes line-itemized)
• Installation labor
• Sales tax
• Deposit applied and balance due
• Payment terms and due date

Payment Disputes and Resolution

If something on your invoice doesn't match what was agreed upon — pricing discrepancies, unexpected charges, or items not received — address it immediately and in writing. Most dealers will issue a credit memo or revised invoice for legitimate discrepancies. Do not withhold full payment over a partial dispute; pay the undisputed portion and document the contested amount separately. This keeps the relationship productive and avoids delaying the rest of your order.