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Thread: Dealing with Business Customers

  1. #16
    If you're going to have customers on terms I'd recommend:

    1. Setting up their account so they have a max credit. You'll have to use your best judgement, but for example, I deal with a local golf club doing a lot of small orders and I had to cap them at $500 or $750. They'd never pay even after notification of outstanding debt. Finally had to say enough.

    2. Always get a PO. This is the most important thing. "Hey, can I order 500 water bottles engraved with "God Bless You" is not an order. Get a purchase order. This is a vendor contract which basically means as long as you deliver, you have to get paid. It puts you on their books as someone they owe money to. While this isn't important for a $100 order, if you start getting some decent orders, you want to be on their books. I can't tell you how often some guy will order something on behalf of the company, never submits the invoice, and you're left chasing money 30 days after they picked it up. Chasing money is a waste of time.

    3. We've looked at it more than once. While I'd love everyone to pay me on time via check or cash, it doesn't happen. I don't trust treasurers to pay on time and I don't trust accounts payable to pay me on time (assuming they ever got the invoice in the first place). If someone can pay me via credit card and it means I'm guaranteed to get paid, I'll eat the 3%. We don't have a cash flow issue, but getting paid at pickup or at the time of order makes following cash flow so much easier than waiting 30+ days for payment.
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  2. #17
    Join Date
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    Ross makes very good points.

    When a new business customer asks me for a quote, I always ask for payment on delivery for a first order but state that subsequent orders *may* be allowed 30 day's credit.

    This is a pretty good stress test of the customer's payment system and if they pay up promptly the first time (almost all do) then I'm happy to give the credit time and where there are a lot of small orders also invoice monthly.

    The one firm that flunked completely is still a customer : for a long while they were on payment in advance (not even working drawings until the money is in the bank), but they finally got their accounts system sorted out so that they get the 30 days, but normally pay much more quickly.

    If I need to lay out significant cash on materials for a less regular customer, I ask for 50% up-front : that way I'm only risking my time. In practice I have never been refused and the balance has always been paid quickly following delivery.
    Last edited by Michael Hunter; 05-25-2017 at 6:25 PM.
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  3. #18
    Quote Originally Posted by Jeff Body View Post
    Florida???? really

    Every gas station around me has a cash price and a credit card price. I've been burned several times because the CC price wasn't clearly marked.

    Wonder how they get away with this?
    Reminds me of how they do Bingo here in 'Gambling is Evil'-land..

    Bingo for money is a game of chance in which you have to pay for Bingo cards for a chance to win--

    ---illegal----

    But what if you DIDN'T have to pay for your Bingo cards?

    ---legal----

    so where does the payout money come from? You pay $20 for a spaghetti or meat loaf dinner, and the Bingo cards are "free"...

    ---legal ! ----

    oh, and if you want more free cards, just pay more for your dinner

    Not sure how the loophole works with the 'cash price/credit price' deal, but is more than likely a 'language' thing--
    if you call it a fee or surcharge, illegal-- but since it's simply listed as a "price" - not unlike 3 for 99c Taco Tuesday - due to the language of the law, it's probably legal..
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  4. #19
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    To make the gas price legal, it is a discount for cash. They may put up cash price, and machine set up for cc price but it is a discount for cash, not an add on for using a cc.
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  5. #20
    I really made a mistake in posting what I did. I've had one charge this week and didn't apply the surcharge. Almost all my business is by check so it makes little difference one way or the other.
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  6. #21
    Quote Originally Posted by Robert Engel View Post
    BTW it is illegal to charge a service fee for credit cards.
    They are not charging a fee - they are "Discounting" for cash.
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  7. #22
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    I have a 3% "accounting charge" that I waive for cash customers...

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