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  • #979442
    Tennasee
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    Does anyone offer a discount for early payment? If so, how much? Do you offer a discount off the next purchase/service instead? I’m trying to get my customers to pay in a timely fashion.

    #1114306
    AGMBris
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    Hi

    Good question. We tend to go mostly Direct Debit and this really works for cash flow. Is that possible for you? Rather then discounting your service. We use BillBuddy which is quite affordable.

    Maybe it can assist.

    #1114307
    clintmaher
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    Why can’t you charge your customers up front with no discount?

    Once you start discounting you become a commodity and customers will expect discounts.

    Doesn’t work in all business models I know, although you can ask yourself the question.

    #1114308
    Divert To Mobile
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    I tried it one time only with a slow payer.
    They still payed late and at the discounted rate.

    Your experience may end differently.

    Steve

    #1114309
    DarianCulbert
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    We offer the cheapest prices already so we could not give any discount! We also think about this offer but actually clients don’t know about this until they come to us so it’s somehow not effective. We need upfront payment from our clients and they are happy to do that! I think if you offer good services and you have good reputation, there will be no problem for clients to pay you when you need!

    #1114310
    Shoes2u
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    I have been in this situation on both sides. I think the trick is a bit of carrot and stick.
    You need to offer very clear guidlines in credit applications, terms and conditions and on the invoice.

    I buy shoes and discounts range from 10% – 5% for payment within 7 days. Sometimes I take the discount and make payment couple of days later but my thinking is I do payment 7 days from when I receive them not invoice date which can sometimes be about 4 day difference.
    Other suppliers offer discounts of 2.5% for 30 days.

    What services/products do you sell?

    Regards
    Shona

    #1114311
    tonyk
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    I offer a discount if a client buys in bulk.

    #1114312
    Tennasee
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    Fishx99, post: 128325 wrote:
    I have been in this situation on both sides. I think the trick is a bit of carrot and stick.
    You need to offer very clear guidlines in credit applications, terms and conditions and on the invoice.

    I buy shoes and discounts range from 10% – 5% for payment within 7 days. Sometimes I take the discount and make payment couple of days later but my thinking is I do payment 7 days from when I receive them not invoice date which can sometimes be about 4 day difference.
    Other suppliers offer discounts of 2.5% for 30 days.

    What services/products do you sell?

    Regards
    Shona

    We are a commercial cleaning service so we need to be cash positive, but a lot of our clients have a 30day (or longer) payment terms. Also since some of our jobs are one-offs or not a regular gig, it’s difficult to wait and still pay our expenses.

    #1114313
    TheGoldenGoose
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    I would only use a discount at a last resort, only I would increase my prices first, then discount back for regular/good paying clients back to the normal price.

    Reward the good payers.

    Firstly I would be looking at my systems/terms to see if anything can be adjusted to prevent it/minimise it in the first place.

    #1114314
    Shoes2u
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    As you are selling services I would not be inclined to offer a discount as you have already provided the service for them
    I tend to pay easiest invoices first – those with no credits, that send me correct paper work, best payment option etc.

    Instead I would concentrate on making it easy for them to pay you by
    1) invoicing them quickly – email
    2) send follow up statements – this acts as gentle remiander
    3) change your payment terms to 14 days
    4)offer number of payment options PayPal, direct debit, bpay, cash, credit card don’t put my barriers between you and taking money. It might cost you more in fees but worth it to have in your hand.
    5) Arrange monthly direct debits with regular customers this is a win win worth the initial paperwork, as you know coin will be coming regularly.
    6) train your customers nothing wrong with a polite call asking when the invoice will be paid. Sometimes better to get accountant or someone else to do this as it can be difficult being money chaser and seller

    Generally large corporations you are screwed you cannot get them to pay outside their account department cycle. With smaller buisnesses if you are providing a good service nobody will mind if you ask for quicker payment terms. Never hurts to call them tell them you changing payment terms due to having to pay suppliers and needing cashflow. Truth often works very well.

    If any customers kick up a huge fuss about having to pay sooner than they probably have bad cash flow are going out of business and quite frankly you are better of rid of them

    Regards
    Shona

    #1114315
    Zava Design
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    My view is that if you’re having issues with customers paying on time that they have agreed to ahead of time, then the issue is usually with the communication between you and the client, rather than any gimmick to entice earlier payment. I’d start by reviewing everything you communicate to the client through the project, and see what can be improved with regards to this area (and potentially other areas while you’re at it). Many small businesses grow organically and don’t really take the time to step back a little and review how they’re actually doing things, especially in the area of client communications.

    #1114316
    Cooke Consulting
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    Hi,

    As you are a service provider I would recommend against it.

    As Shona already eluded to, it’s about getting the structure in place to ensure that your clients pay you on time.

    Although I don’t agree about the comment regarding large corporations. Your payment terms are your payment terms – they agreed to them when they used your services, it’s down to you as the business owner to ensure you follow it through and really that will only be achieved through repetition.

    So some quick tips for you.

    1) On your invoice make sure you have a payment due date and your payment terms clearly shown e.g Net 14 days
    2) Ensure you have a ‘How to Pay’ section on your tax invoice in order of preference e.g. EFT, Credit Card, Cheque, Money order
    3) Have clear directions on where / how clients are going to pay you. e.g Make sure your bank details are shown clearly if they are making EFT payments, contact details for your accounts dept if they are going to pay by credit card or your address if they are sending a cheque.
    4) If you’re not doing so already – contact ALL your clients and get email addresses and contact details of wherever the invoice needs to go. This will also give you a contact point if you need to chase payment.

    As for chasing payment

    1) Ensure you have a series of payment reminder notices that can be called up at a moments notice that you can quickly attached a copy of your invoice to an email. As this will be the first thing your clients will say “Can you send me a copy of the invoice please”.
    2) Once you made contact get a date when they will make payment as well as the name of the person you spoke to. Ensure you make a note of it.
    3) Set yourself a series of reminders to follow up clients who have broken any agreements to pay you
    4) Don’t be afraid to contact them to ask for payment or to remind them of your payment terms. As long as you are respectful and do it in a courteous manner you’ll be fine.

    If you need help or clarification, feel free to send me a PM.

    All the best,

    #1114317
    bridiej
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    I offer a 5% discount for pre-payment of transcription, although actually I only have a handful of clients who choose this option. My way of thinking is it’s a little less for them to pay and I have their money upfront so I don’t need to worry about late payments = win:win.

    #1114318
    Mrs Fox
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    Customers who consistently fail to pay on time obviously are struggling with finances, so giving such discount will help keep them afloat. Some big-time sellers like Godaddy also offer such discount, but not on a regular basis.

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