Signing up as a big customer's supplier: what you're agreeing to, and what you can still ask for

A supplier agreement is the set of terms a big customer asks you to accept to become one of its approved suppliers. Once accepted, it governs every order, and your own terms of trade fall away. Your payment term, the invoice rules and who owns the goods are settled at sign-up, so that is the time to ask.

More of the businesses we work with are signing up as suppliers to large companies, councils and public bodies. The agreement usually arrives as part of onboarding: a form, a portal to register on, a code of conduct to sign, a box to tick. It sets when you get paid, how you invoice, what can be taken off your invoice and who owns the goods. A business that just wants to do a good job and get paid can end up twisting itself into knots to fit someone else’s system. There is more room in that system than it first appears.

How you agree to it, often without signing anything

We read nineteen sets of supplier and purchase order terms that large New Zealand buyers publish: councils, health and education, energy and telecommunications, food processing, retail and construction. In most of them, you can accept their terms without putting pen to paper:

• By ticking a box on the supplier onboarding form in their purchasing portal.
• By starting the work or delivering the goods.
• By saying nothing. Some treat a purchase order as accepted unless you reject it within one or two business days.

Whose terms win, and what beats theirs

Every one of the nineteen excludes the supplier’s own terms. Your terms of trade, attached to a quote or printed on an invoice, don’t travel into the relationship. Once you have signed up, their agreement is the ruling document.

What does carry weight is anything written into their own higher document: the purchase order, a schedule of specific terms agreed with you, a signed agreement, or the payment terms recorded against you in their supplier system. Several of the buyers we read say in their own terms that different terms can be agreed, and say when: before you supply. The time to ask is before the first job, while you are still signing up.

The payment term you get if you agree nothing

The payment terms in these documents run from the 20th of the same month to three months after the invoice date, and in one case 120 days. Read closely, the longest are fallbacks. One buyer pays three months after the invoice only where no contract term and no payment term in its supplier records applies. Another pays at 120 days only for suppliers who did not agree a payment term. A third expects the payment term to be agreed before supply, with the 20th of the following month as the fallback.

No New Zealand law caps payment terms between businesses. So the term you end up on is often whatever was written in when you signed up, or whatever applies when nothing was.

Ask us about an agreement you’ve been sent

When the clock actually starts

In most of these agreements the clock starts when they receive a correct invoice, often only after they have accepted the goods or the work. Small details decide the wait:

• A cut-off day. Several pay on the 20th or at the end of the next month only if the invoice is in by the 5th. Miss it and the payment moves a month.
• The purchase order number. No PO number, no payment. The invoice comes back to be reissued, and the month starts again.
• The portal. Some accept invoices only through their purchasing system and ignore emailed ones. One charges a handling fee on invoices sent any other way.
• A missing detail. One treats the date the missing information arrives as the new date it received the invoice.
• A late invoice. One will not pay an invoice that reaches it more than 180 days after the work.
• The price. One is not bound to pay unless the price was agreed in writing before the work started.

Every one of these is something you can find out at sign-up, before the first invoice goes out. Their rules are written down. Knowing them is how you get the days back.

What else you are agreeing to

• Deductions. Most give the customer a right to take what it says you owe off what it owes you. The widest reach across the customer’s whole group and every other agreement you have with it, so a dispute on one job can hold money on another. In retail supply, rebates and promotional contributions can come straight off your invoices.
• Who owns the goods. Most pass ownership to the customer on delivery or acceptance and require the goods to be free of any security interest. Some say plainly that retention of title has no effect, or that you may not register on the PPSR. Two of the public bodies we read do the opposite: their own terms keep ownership with the supplier until it is paid.
• Changes. A few let the customer change the terms by notice, with your next order or delivery counting as acceptance. Most let the customer end the arrangement without a reason, on anything from immediate written notice to 30 days, usually paying for work already done.
• Insurance and liability. Insurance floors run from “normal for businesses similar” to yours up to $10 million. Two say the floor can be lowered if you ask. Indemnities mostly run one way.

If your terms of trade carry a retention of title clause, this is where it is won or lost. More on how it works: retention of title.

Is it construction work? It matters

On construction work, the Construction Contracts Act 2002 gives you a payment process that applies whatever you sign. Supplying standard goods or materials, with no installation, is likely outside it. The Act covers building, installing, repairing and maintaining, and components made specially for a particular building. Supply and install is inside. So is maintaining plant that forms part of the land, or a building’s own power, heating, ventilation and fire systems. Running or managing a building is outside it, so a facilities contract can be partly in and partly out.

For a business that supplies, services or cleans, that means the agreement it signs carries more weight. If your work is construction work and you are tendering or subcontracting, read signing their contract.

The law that sits under their paper

Unfair contract terms. Since 16 August 2022 a one-sided term in a standard form contract between businesses can be declared unfair, if the whole trading relationship was worth $250,000 a year or less when it began, or when the agreement was last renewed. The size of the businesses does not matter. Only the Commerce Commission can take a term to court, and a complaint is how it hears about one. In 2025, after a complaint from a single business, the Commission told an electricity network company that terms in its standard contract were likely unfair, including one letting it change the contract, price included, on its own. The company agreed to change them. The Commission also said that a term being common in the industry does not make it fair, and that a promise to rarely use a term does not fix it. That was the regulator’s view; no court has ruled.

Unconscionable conduct. The Fair Trading Act bans it between businesses of any size, and a business can act on it itself. The bar is high: the Commission describes it as more than hard commercial bargaining.

What fair looks like. Supermarket suppliers have a code of their own, the Grocery Supply Code. It requires good faith, a payment period written into the agreement, no deductions without the supplier’s written consent unless the agreement provides for them and they are reasonable, no backdated changes, and no retaliation against a supplier who stands up for its rights. No other sector has one, but it is a useful list to hold any supplier agreement against.

The Government’s own advice to small businesses is to check a larger business’s standard contract carefully and to ask for the changes you need. It says changes are accepted more often than you might think.

See how we can help before you sign

When you would rather have the work

Most owners don’t push back on a big customer’s agreement. They would rather have the work than not have the work, and the agreement looks fixed. But once it is signed it overrides the protections you would usually rely on, and it becomes the document every later order runs under.

Signing up often lands on whoever does the admin, as one more form. A supplier agreement deserves the attention you would give your biggest quote, from the person who carries the risk. And you have more leverage than it feels like. Big customers buy reliability, predictability, low friction and clean paperwork, not only price. The more your business is those things, the more say you have. Where a term carries real risk and can’t be moved, it belongs in your price, or in stronger terms somewhere else in the deal. The agreement you sign up to decides more about how you are paid than any invoice you send afterwards.

What you can put in place when you sign up

• Decide who in your business can sign up. Including the box on the portal.
• Read it before you sign, or before the next job if you already have. Payment, deductions, ownership, changes and ending the arrangement first.
• Know which document governs. Their standard terms, the purchase order, a specific terms schedule, a signed agreement, or their supplier record.
• Get your payment term written in. Into the agreement or their supplier record, so you are not left on the fallback.
• Learn their invoice rules before the first invoice. Cut-off day, PO number, portal, who signs off the work.
• Ask about the floors. An insurance level set for far bigger suppliers, a reach of deductions across the whole group.
• Price what you can’t move, and keep how much you carry at any one time in line with what you can afford to wait for.
• Know your line before you need it. You’re allowed to have your own terms, and to say no.

And when the agreement is signed and the agreed terms still get stretched, that is a different conversation: when a customer ignores the payment terms you agreed.

This page is education and commercial insight from our own research and experience, not legal advice. Do your own research, and get legal advice for your own situation.