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Prompt Payment Discounts


Riggy

Question

Does anyone offer prompt payment discounts?

How much and for how long?

Do they work?

(Please don't start a poll! :D)

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History will repeat itself (motor industry, miners.....)

Tolpuddle Martyrs?

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late payments of debt act or something similar

see here for more info

Andy - that only applies business to business debt, not direct to your customers

Can I charge individuals statutory late payment interest?

No, the legislation only applies to business to business transactions.

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With the post the way it is, cant believe they are striking, I am trying to get more customers to pay by bacs. I am having a lot of sucesss and it really helps the cash flow. I may offer a discount if paying by bacs in the future as the extra charge for the o'draft will be covered by quick payment, I hope!

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Andy™

i thought we were on about commercial stuff rather than domestic in this thread?

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Too old, not to mire this thread in the postie strike, but its the government and RM management in the wrong, not the posties (I speak from experience of working at RM this century).

AndyGuiness Drink

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wasnt meaning they are wrong, just do they know how hard it is for everyone else and how little support they are going to get from the general public. My neighbour is a postie so I do have sympathy, but they have lost 6 letters a month from me as invoices from two suppliers payments to both are now done electronically. I am also payimg cheques in through the atm not at the post office so another two letters a week lost. There must be a better way than striking.

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We don't with our company, but a company I used to work for did, the only trouble I found was some customers used to take the discount even though they didn't pay on time, and then you have a job to recover it.

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Oh I agree with you old about a better way of striking, its called work to rule. If you do that in RM then letters etc are still being processed but the backlog turns empty warehouses into full ones, a real headache for RM management and both the posties and the public are happy as the service is still contuing albeit at the minimum standards RM have pledged. Doing it this way will open up the public to what RM are doing.

AndyGuiness Drink

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I remember the postal strike in the 80's. It did wonders for the sale of fax machines, which was new technology at the time. Maybe this one will bring people out of the dark ages & get them to use the internet & BACS etc. a lot more. Just maybe we can get rid of the silly little bits of paper known as cheques.

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I do feel selfish not using the post service but I have to pay the bills. I still tax my van at the po, one of the reasons I'm with A&L is its through the po, I like keeping it local etc and would carry on but the "cheques in the post" routine costs.

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Can't stand the queues in the PO. Only time I go is if i've got a parcel. The old dears paying all their bills over the counter & withdrawing their money just does my head in & takes forever. Have these people never heard of standing orders, direct debits & bank accounts?

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Yes they have exbdc, but that little ist of things is as foreign to them as texting, iplayer, ipod is to Me :P

AndyGuiness Drink

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Over the years I have found two problems with settlement discount.

1. Where do you draw the line if a customer pays a few days late but the cheque was posted before the cut off date? I have had numerous arguments over the years with this & if you leave the settlement amount outstanding it never gets paid & you end up issuing a debit note to cancel it.

2. It can play hell with VAT returns especially with the above scenarios.

Obvious solution is not to offer it & put customers on stop when their accounts are overdue.

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Does anyone offer prompt payment discounts?

How much and for how long?

Do they work?

(Please don't start a poll! :D)

Done this for years now.

When you quote add an extra **% to the cost (dont lable it as anything just put it in with general costings).

Then when you send invoice put a foot note stating that if funds are paid before ** date a **% can be deducted from the overall invoice cost (dont say a refund)

This way all the customer is getting back is a **% that they were quoted.

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Yes they have exbdc, but that little ist of things is as foreign to them as texting, iplayer, ipod is to Me :P

AndyGuiness Drink

But at least your halfway there. You can use a computer & surf the internet.

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We have done this on a few occasions; esp. if it`s a new customer & the 6th sense kicks off a bit.......

Normally 5% if paid within 7 days - mind you, that 5% goes ON the bill before I issue it - If they pay promptly, I get the amount I want. If they don`t, they owe more :)

(plus, after 28 days you can add interest at the statutory rate of 8%; plus a late payment fee of

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Andy™

i dont, although there is one company that i done a job for a few month ago who took 2 month to pay. if they ever phone, for the inconvenience i will be adding 20% to the bill, and stick a note on invoice saying 10% discount for payment with 14 days.

and the 'extra' is compensation for last time.

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(plus, after 28 days you can add interest at the statutory rate of 8%; plus a late payment fee of
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Evans Electric

I don't, they should pay as agreed terms , mine are either , on completion , 30 days, 60days ( trusted customers)

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Andy™
What is the legality of this? We were told by an accountant that we can't add interest as a percentage as we are not a licensed credit broker. We have a fixed price to re-issue an invoice.

late payments of debt act or something similar

see here for more info

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Apache

We do - 2.5% if paid within 30 days. Not much and not sure it makes a scrap of difference.

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Thanks fellas, looks like not the way to go then.

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i dont mainly becuase i give good prices anyway ;)

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i dont mainly becuase i give good prices anyway ;)

So do I, obviously I intended to add a bit on to cover the "discount"!;)

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Apache
So do I, obviously I intended to add a bit on to cover the "discount"!;)

Just remember your percentages. If bill is

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