Discount on invoices for customers – will they pay faster?

Discussion in 'Growing and Managing a Business' started by JMS, Jun 23, 2012.

  1. JMS

    JMS
    uix_expand uix_collapse
    New Member

    Joined:
    Jun 23, 2012
    Messages:
    1
    Likes Received:
    0
    I have a telemarketing company today selling business to business.
    I have thought about offering customers a discount if they pay the invoice on time or faster than the due date.
    I have thought about printing this discount information on the invoice.

    Have anybody tried this before, does it work and what kind of discount % would be realistic to get the customer to pay the invoice I time or faster than normal?
     
  2. Choice Checks

    Choice Checks
    uix_expand uix_collapse
    Member

    Joined:
    Aug 27, 2010
    Messages:
    65
    Likes Received:
    13
    Not necessarily. Every company operates differently and request payment differently. On every order that comes through. It must be pre-paid before anything is done for the business checks, accounting software, tax forms and etc... I have done billing before and its a pain to do. Some will pay on time and some wont. When you do services for someone else and they wont pay on time. It does cost money and you worry if your going to get the money or not as well. If you offer a discount. Have them to pre-pay upfront if you can. Why offer a discount on a payment that is due to get it quicker. Your loosing profit and money that way. If someone passes the word around that if they are late, your giving discounts, that will hurt your bottom line.
     
    • Like Like x 1
  3. sigma

    sigma
    uix_expand uix_collapse
    Active Member

    Joined:
    Aug 31, 2009
    Messages:
    1,944
    Likes Received:
    283
    Not all the company will pay you faster especially those big company, they have their own payment term for their supplier. By the way, it is still works for those medium or small company, they might consider to pay faster if there are some discount.
     
    • Like Like x 1
  4. Fergal

    Fergal
    uix_expand uix_collapse
    Premium Member
    Premium Member

    Joined:
    Nov 18, 2007
    Messages:
    10,575
    Likes Received:
    1,165
    Welcome to Business Advice Forum JMS. I've seen lots of companies offer discounts in return for past payment and in a lot of instances it works very well. Smart companies will pay you early in order to avail of the discounts and this has obvious advantages to your business in terms of improving your cash flow and reducing the risk that you wont get paid. The percentage discount that you offer will depend on your own individual circumstances, would 5% be too much?
     

Share This Page