Business question

[teagg]

I quite like the invoice that I received just recently... in small writing at the bottom, there was a comment that there was a $200ish discount if the bill was paid by X date... an incentive to pay early...
which i assume has been factored into the original price to start with...

so i 'feel' i'm getting a benefit if i pay promptly and if i don't, then they are getting a larger payment...

having said that, i now offer to pay upfront, rather than expecting them to stump up the charges and then I saunter along in my own time to pay!!!

[gertbysea]

 I know  of one huge company that pays every invoice $5 short. Can you imagine how that adds up for them .  Clever accountant I say because most would not notice and if  they did they would not chase up five bucks.

Gert

[Cuilidh]

... so i 'feel' i'm getting a benefit if i pay promptly and if i don't, then they are getting a larger payment...

Yes, it's a psychological trick.  Put the price up, then offer the customer a discount and they think they have 'won'.

We once had a customer who asked us for a discount and we said no, we charged the RRP.  Customer said they could get a discount at another shop so we urged her to go there as it was a better price for her.  She came back an hour or so later (after spending money on petrol and parking as well as using her time to get there and back) to say that, even with the discount, the other shop was more expensive than us and she purchased the item from us in the end!  Just as a matter of interest, the RRP of the item in question was c. $50.00!

[obbie]

Marina, yesterday I rang a customer asking for payment, which was overdue.

 It is 3 weeks since we did the job, so our terms are 7 days.   She says, yes its at the post office, but we haven't got the mail yet, so when we do, well get around to it.

So I am now sending her a invoice for interest.

[mcmich]

That's terrible Robyn.

I'm sure she would be jumping up and down if you did the work when got around to it.

[Cuilidh]

Yes, and I suppose "the cheque is in the mail" will be tomorrow's story!  Is there any way you can do what we do, i.e. not release the work until payment has been received?  Once the job / goods / service have left your premises your control on receiving immediate payment is also weakened.  If you have to do a service on the client's site, is there some way your guys can issue an invoice there and then so at least that is one less excuse for holding up payment?  Maybe making it clear at the time the service is requested by your customer that payment is required on completion of the job?  give them as close an estimate as you can so there is less chance of problems when the time comes?

I know I recently had to call in someone to come to service our washing machine and it was made crystal clear when I made the booking that immediate payment would be expected.  I know your main clientele are farmers and many are struggling, but they must appreciate that you need their money so that you can continue servicing them in the future.  It does no one any good if you have to close down (not that I am suggesting for a second that you will, but always keep in mind that you are just as vulnerable in your own way as they are).

There is no easy answer but keep a sight of your ethics and keep doing what you do best.   Also is there someone nearby whom you can approach as a mentor to your business?  Just being able to talk to someone else and bounce ideas back and forth (brainstorming) can be a huge help.

[obbie]

Thanks Marina..

[Debbiebillg]

Marina, yesterday I rang a customer asking for payment, which was overdue.

 It is 3 weeks since we did the job, so our terms are 7 days.   She says, yes its at the post office, but we haven't got the mail yet, so when we do, well get around to it.

So I am now sending her a invoice for interest.

Just another tip from an ex Credit Manager, if they say the cheque is in the mail ask them to supply you with the cheque number, it's meaningless to you but I have had many a people tell me the cheque is in the mail only to find out they thought they'd done it and hadn't.  By asking for the cheque number, it forces them to find their cheque book, look it up (which confirms they have written it)and tell you the number, then also ask for the date on the cheque butt and the date they think they posted it.  All of these questions, let them know, you're not messing about ! And they can't fob you off with "the cheque's in the mail".

Likewise, if they tell you that they have paid by direct deposit or Bpay, ask for the transaction number (also meaningless to you), and ask them to check that the payment has been deducted from their account (they can be forward dated, so this checks that this isn't the case).  If they tell you they'll process the payment that day, ask them to call you back with the receipt no. and if they don't call, call them !

If someone is in a situation where they seriously financially can't pay, work out a payment plan, diarise the dates when the amounts are due and ring them without fail on the day ! Always better to get something, than nothing ! I used to send out sales reps to pick cheques up for me, hard to not pay when someone's there to get the cheque !

Ohhhhh I miss my old job ! The thrill of the chase ! Being a Mum is of course rewarding too but  I'm just getting to the stage where I need to return to work for me !

[obbie]

Thanks Debbie, I chase all the time. I have even been offered a job as a debt collector. 

All our friends ring me, when they have to chase and ask advice.


I explained to a guy last week, I am not giving him any more credit, as per our trading policy. He has to pay upfront, like everyone else.  He then complained to my DH the next day, who totally backed me up.  Its going to take him 3 weeks to pay $120, but he buys takeaway coffee, and smokes.... I said I am not a lending institution.

[droverjess]

Good for you.
We had to take a customer to small claims court this year. She had to pay costs too.
Bet she thought we wouldn't chase her, but she owed and wouldn't pay.
All good now.

[obbie]

I send the overdue ones to a legal firm, which does collections too.
the rate is 25% plus my 18% interest.

it works..