Forums: Discussions for entrepreneurs and small business.

I do most of my reupholtery work locally, but a growing segment of my business is from my website. When I bill my local customers, I take a 1/3 deposit to start, then collect the remainder when I visit their location to install the upholstered items on their chairs. When I deal with a customer who is across the country however,(and who I will never meet) I feel it`s necessary to do things a bit different. I would like to take a credit card for the full amount, but I understand that most people would want to take delivery of my shipment before paying the full amount. This could leave me open to a customer who pays the 1/3 deposit and then never " gets around" to paying the remainder forcing me to go to a collection agency or something of that sort. Does anyone know a method that would be fair all around that doesn`t leave me in a risky place?

Thanks,

Rich

50% deposit to commence work.

Balance on delivery.

Or Rich, you can avail yourself of our 10% discount by paying in full up-front.

Rgds,

Ric

Thanks Ric,

The discount is a positive way of encouraging payment.

Rich

I think 10% is a high discount for pre payment, but I have seen companies do it before, even worked for one. Why every customer didnt take advantge of it is beyond me......

 

Is escrow an option? I asked a few weeks ago just that question. I really am unsure how people would react to that....thoughts?

I agree with Ric.  It is better to collect and have the money than to try and get it later.

 

Here`s another idea.  A friend of mine has an item that sells for about $1500.  She does half down one month and paid in full the next month when the item is sent.  There are times that she will break it down into 3 months, but it has to be paid before she will send it.  She guarantees the product 100%, but if it is returned, she charges a 25% restocking fee as now it becomes a "used" product.  Just an idea.  (This way does require more bookkeeping and follow-up, but she does get full-price.)

I assume you work with medicare and insurance companys, Also individuals that must pay co-pay or the total amount of the service. It is hard to push people for their payments when they

are past due therefore it is important that you take the time before the services are rendered to see proper payment is covered. Ric is right you should get a deposit if possible before you deliver the treatments. But in your business that is not always possible, therefor I would

1.  Have them sign a contract, make them pay any co pay, check with insurance to make sure

     they have insurance before you deliver services.

2.  Give them as many options as you can for payment. Visa, Mastercard, etc.

3.  Make it very clear to the patient that payments are due when rendered.

4.  Explain that all payments that are owed are due the first and fifteenth of every month

     and you must take their credit card number and bill it to that account if payments are not

     paid on time.

5.  Then pray to God that the money will come in, in time to pay the rent.

 

Accounts receivables are always hard to collect but it is something you must work at constantly.

Winston