Alternative payment terms for customers

The recession hit everyone and some people were more impacted by it than others. Instead of asking your customers to pay for their invoices up front, you may want to look into some alternative payment terms. This offers your customers a little more flexibility, which helps to build stronger relationships with your customers. It will also help you build a stronger reputation in your industry, allowing you to attract new customers.

Right now Paypal is a great payment term option for your customers. It's free to use, which is great for online payments if you need to set up an online shopping cart. Since almost everyone turns to the internet to shop, you need to provide your customers with several different payment terms. This will make it much easier for them to acquire the product without the concern of how they will pat for it. Google checkout is another great online system if you need to set up a shopping cart feature and start accepting payments from your customers.

Net Terms
One of the most common payment terms is using Net Invoicing. Net Terms allow you to acquire part of the payment now and the rest later. Typically you will ask for a 10-20% down payment at the time of the sale and then you will give the customers 30-90 days to make payments on the rest of the invoice amount. Net terms are beneficial to companies as they help to build a stronger relationship with their customers. The downside to net terms is that you will be stuck with the dip in your cash flow until the customer finally offers you the money to pay off the invoice. This means you need to have some money set aside in your cash reserves to make up for the loss of money while you wait on people to pay their invoices.

Bill Me Later
A great way to make purchases with your vendors and to have customers buy from you is to turn to Bill Me Later. This check-out system offers a business account, making it easier for you to extend payments over time. Basically you will purchase a product from a company that is registered with the program and then you will choose a payment option. A number of companies are using bill me later including Walmart and Overstock.com. Create an account with Bill Me Later in order to provide your customers with another payment term that can work around their vulnerable financial needs.

Trade Credit
Many companies still rely on trade credit with some of their customers. If you have a vendor that buys products from you, why not consider swapping for trade? Trading products or goods for each other is a great way to acquire what you need without setting aside money for it. However, you do need to be careful as it can get pretty pricy if you aren't watching the value of what you are trading for. Calculate more than just the basic cost of production; also include additional overhead costs such as your operating expenses, and other costs. This allows you to understand just how much money you need in value for the other product you are trading for.

Look into multiple payment options and sources when you are trying to offer your customers with the right type of service they need. Some customers still pay with cash even though the majority of your customers probably pay with credit cards. You do need to take a look at the different credit card fees before you start accepting all of them. Visa and Mastercard are cheaper than Discover Card and American Express so it may not be a good idea to accept the ones you cannot afford.