How do you handle payment terms and collections at your company?

[Sarah P]

Hi! We know expanded Payment Terms is a high priority feature for several customers (and it's coming!!), but I wanted to hear how you currently handle variable payment terms with your customers now. Are you using On Hold status? Various triggers? 

Let us know! 

[Sarah P]

@Geoff Kessler @Mary Theurer @mebo @SusanM would love to hear from any of you!

[Ashley]

Oh I also have a question on this as we scope it as well!

If you chose, for example, to require 50% down payment upon order, and then 2% discount if paid in full before the due date - should that 2% be discounted from the original/total order amount or should it discount 2% off the order total or just 2% off the remaining 50% that isn't paid yet?

[Geoff Kessler]

@Sarah P we don't really use variable terms such as the 2% off if paid before due date. The big one for us is net 10th. Having all the months invoices show an accurate due date of the 10th of the next month would be wonderful. Currently we just use QuickBooks for all of our statements and tell the customers to ignore the due dates on their invoices and go by whatever the statement says.

[Sheldon]

In our old system we gave a % discount if paid in 30 days. The invoice showed the reduced total & the pay by date. When we transitioned to Allmoxy we set these accounts up to have the discount taken off at the line item level with a price adjustment discount. We basically grandfathered in existing customers with these terms & trusted them to keep paying in 30 days. We have to manually monitor that this is actually happening. It has not been much of an issue. We don't offer this to new customers. @Ashley In answer to your question - Technically the discount should be calculated on the total order amount since it is all paid before the due date. But... In my opinion, requiring 50% down & then allowing X amount of days after delivery to pay is a hybrid form of COD. COD customers do not deserve a discount because they are an inconvenience. Now if you set up triggers to collect this payment & your customer is entering their own orders online then it may not be an inconvenience. I have over the years had COD customers argue with me about this because they are paying sooner than someone with terms & think they deserve it. We have a set of customers who don't have internet, so COD with this group is a lot of extra work for our office & truck drivers.

[mobo]

@Ashley we would always apply the discount to the order subtotal. We only offer those terms to customers who pay for the entire invoice amount in one payment, and we would only offer it to customers who pay by EFT or cheque where we aren't also being charged transaction fees. We find payment terms quite difficult to keep track of given that there's no indication on the ship schedule when a customer is expected to pay their order balance prior to the order shipping out. What we have started doing is setting up all of our 'pay first' customers with a tiny credit limit (our go-to is $0.25 but anything small would work). This at least gives a warning on the ship schedule if a customer has not paid off the balance of their order. It would be nice if there was a better way to handle the pay first customers. 

I agree with @Geoff Kessler... for our customers who send us a cheque for their statement amount at the end of the month, there's no good way to set up their invoice due dates to avoid having interest charged when it shouldn't be. We would appreciate the option of net 10th as well.