Can You Get Paid on Delivery or in Advance?

If you are willing to accept credit cards or an e-check, you

Most major credit card companies and banks offer special credit card services for smaller, growing businesses. Consider asking your customers — especially new and small-order customers — to pay by credit card. You'll have to pay a little (typically 2 to 6 percent) for credit card service, but you'll save much more by limiting the number of bad debts you incur. New customers will also feel more comfortable working with you if they pay by credit card — if you don't deliver or perform, the credit card company can help settle the dispute.

E-checks also allow for instant payment. E-checks work much like direct deposit — you keep a customer's voided check on file, which allows you to debit their bank account for the amount they owe you. Then you send them a copy of the debit for their files. Some customers like this method of payment since it reduces the number of bills they have to remember to pay on a regular basis.

A few other ways to get quick payment:

1. Send an invoice the day you make a sale. Why wait until you deliver the product or finish the project to bill your customer? The goods are on their way — get the bill to the customer now to encourage payment on delivery. Read What Information Should My Invoices Include? for more information.

2. Offer a discount for paying ahead of time. Discounts can be a powerful tool to entice customers to pay ahead of time. The easiest way is to put a bold notice on your invoice offering a discount, usually 2 to 3 percent, for paying within 10 days. A more aggressive strategy would be to warn customers that prices will increase the following month, and that the customer can save a bundle by buying and paying now.

3. Create a standard payment form. A payment sheet that details the various ways to make a payment is an invaluable tool for your salespeople to lay on the table as soon as they close a deal. Not only will customers know their payment options from the beginning; they will also understand that your company takes bill payment seriously. Also, consider using a detailed purchase order to let customers know you mean business. For more on that, read Essential Provisions in Purchase Orders.