atcomsystems.ca/forum Forums General General Telephone & Systems Information Getting people to pay: Is this a valid "stick?"

NET30 is getting tougher for me as well and I have considered accepting credit cards for more immediate, reliable payments.

When presented with both rate structures, your honest customers will always choose the cheaper route. But what prevents a scumbag from taking the higher credit rate and then stiffing you anyway? In other words, your scheme offers reward for the honest guy, but no real punishment for those who hadn't planned on paying their bill in the first place.

As I see it, the goal is to avoid attracting those with a "why pay for it now when I can pay for it later at a higher rate" mentality. Setting tighter terms like NET10 (for new customers only) might accomplish that. Tell them that you'll relax the float to 30 days AFTER they have established a payment history with you.

How you define "payment history" is up to you: it could be based on number of invoices paid, amount or a combination of both. For example, you might decide that three on time payments of at least $200 is a worthy credit risk. Alternatively, you may decide that a total of $5,000 in billing is required--irrespective of the number of invoices submitted and paid on time.

We have a company policy that ALL new service customers are required to pay COD. No exceptions. They remain COD for the next 3 service calls. (4 total) After that, they get NET15 for 1 year. After 1 year of good payment history then they are given NET30. This policy may have cost us few customers that didn't want to pay COD, but if they didn't want to pay COD they probably wouldn't pay NET15 or NET30 either.

On Quoted jobs for equipment or cabling we require ALL customers, new or exsisting, 50% down at signing, 50% due NET30 upon completion of job. Again, this may have cost us a few customers that didn't want to pay the 50% down, but it really weeds out those that are slow or non payers. These policies have kept our write-offs at less than 1% and have given us a solid customer base of good payers.

What do you do for government accounts? Most government offices don't have cash, credit cards or cheques on hand to pay up front?

With the exception of California which I hear is paying in "funny money" I think they are a good risk for billing.

In a lot of cases though, you tell the customer this before you roll a truck and when your tech finishes, guess who isn't in the building any more?

hint hint, the check signer.

I despise no pays. I also chase no pays to the fullest extent to which I am allowed. Late fees, bugging phone calls, lists on websites for no pays, NCO Collections and finally, small claims court.

I have won 100% of no pay cases I have pursued.

oh and also, I only extend net terms to very special customers. Everyone is expected to pay as my tech leaves. someone stated maybe they lost a few customers, but these are probably customers you don't want anyway. I'd rather not send my techs to do the work than not get paid for it.

Government.. someone ALWAYS has a credit card.

Schools, they ALWAYS pay, I always extend any school terms, never a problem.

Also, I make sure to be very very clear about the payment terms when i set up the service call on the phone. Here in Houston, we don't see too many problems, but no matter where you are, there will always, always, always be some issue.

If you lose some money, don't lose too much sleep over it, certainly don't let it make your blood pressure go up! You can simply write the whole amount directly off your tax return at the end of the year as bad debt. In reality, you get the money either way.

" In reality, you get the money either way."
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Well, not really. That's just money you don't have to pay taxes on! 10-30 percent? If not getting it results in not stepping into the next bracket... 50%?

"You can simply write the whole amount directly off your tax return at the end of the year as bad debt. In reality, you get the money either way."

100 percent not true!!!!!!!!!!!!!!!
You better talk to you accountant, small business does not work like this, your accountant will explain this.

Std rate is $xxx. Net 10
30% discount for Immed payment, this is noted on the work order as payment postmarked no later than 2 days after receipt of invoice.
Of course there is play for good customer.
The discount rate is what I want to make.