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Credit Accounts OR Cash on Collection / Delivery?????
Hi all,
Here’s a question for all self employed sign makers. Do you run your shop with most regular customers on credit accounts or do you operate a cash on collection system?i went out on my own 5 years ago and at the time took on quite a few customers on credit accounts as i was eager to build up my customer base. This was never a huge problem – but now that the recession has kicked in I find that I have a lot of small jobs done (€50 -€300) out on credit and the customers aren’t paying up so easily.
In fact – I’ve spent way too much time chasing money over the past few weeks.As we all know there’s no money in chasing money and I just don’t have the time for it anymore – I’m strongly considering tidying up the current accounts and changing to a strict ‘50% deposit, 50% on collection’ system. I presume most of you already operate on a similar basis already but wondered what is the norm for a 1 – 2 man operation? will I alienate bigger clients with my ‘50% deposit, 50% on collection ‘ system?
please leave your opinion on the best way to operate accounts.
thanks in advance,
John Moyles. -
10 Replies
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john, that’s what we have switched to this year, unless they are a great paying longstanding customer, fed up with bad debtors and slow payers!
havent had anyone turn down a job yet!!regards
dan
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thanks dan, thats the kind of thing i’m hoping to hear. i’m sure it’d be a lot easier to run my business without chasing credit customers. do you find it has freed up more time for you? also is it a good idea to only provide artwork / proofs after a deposit has been paid?
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i Must admit, I do provide proofs without 50% but it is made clear before we start what the deal is, and then as soon as they want to proceed with a job, cash down! Keeps me on my toes as well as people much quicker to chase you for the job when they have paid 50%.
regards
Dan
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I do a 50/50 too, 50% when ordering and the other 50% on delivery or collection
Never let anything go without the money, just not worth it anymore
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Dunno if this will help at all or just confuse matters….
https://www.uksignboards.com/viewtopic.p … sc&start=0
Gareth
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I am 50/50 too.
Never a proof without a deposit either.
There are a few bigger companies for whom I do work and they are Net-30.
But I am no longer taking on any new Net-30s unless I really know them.
Just got paid $1650 from November from a Net-30.
Was warned by an insider not to take any more orders from them, too!It’s amazing how many average Joes come to pick up their signs and "forget" their check book.
I will not leave a sign at a business or let someone pick one up without a check.
And I don’t take credit cards, but have taken payments via PayPal.
Love….Jill -
I always take 50% up front regardless who they are now. Some of the regulars are more than happy to pay upfront. I’ve had big problems in the past with people not paying so much it nearly finished me. This week I’ve started employing a debt collector to sort things out. He charges £18 per hundred he collects. Expensive maybe but cheaper than running through court, or running around myself. Leave it to someone who knows how to handle these kind of situations and you get to carry on running your business. If I go and collect and am met with crappy excuses I lose my rag then it’s downhill from there. Over the past 3 years I’ve lost nearly £14,000 due to firms going bust or disappearing. I aint losing no more. 😉
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Thanks everyone for your help. I’m going to look into getting a debt collector to sort out my longest overdue accounts and am changing to a 50/50 system from monday. it’ll be interesting to see if business slows down any as a result (hopefully not!). I’m confident now that this is the right decision, at least i’ll be sure that i’m getting paid for all the work i do. Thanks again… John.
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At least if lets say 90% of your I.O.U’s pay with using a debt collector it’s better that 100% not paying and thinking you’re a push over. You can avoid using a debt collector in the first place by putting your quote in writing on every job and state clearly your methods of collecting unpaid invoices. It would also help if the collection company you employ is clearly printed on the quote to give the impression you use them on a regular basis.
We all like to be a little lenient if we can as I have. But through experience I’ve learned being lenient can lead to a nosedive in your cash flow and that’s bad news. -
80% of our work is 100% payment upfront before we get started. The rest is on account or 50/50 or 100% on pickup. Depends who they are.
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