Credit terms and accepting credit cards

[barryk]

I have been in business for a number of years and over time our handling of receivables has become more relaxed party due to personnel changes and not having a full time bookkeeper.

I do offer credit to established customers and I have virtually no bad debts (0.1 %). We also accept payment by credit card and over the years the percentage of people paying by credit card has grown and so I pay a fair amount of fees each month.

For a number of years anybody wanting to pay by credit card basically paid COD and those with terms would send cheques. Unfortunately over time customers are taking longer to pay and those with terms are now paying with credit cards so they are getting the benefit of terms but I am also losing on the fees and cash flow is getting tight.

I am wanting to revert back to my old ways and start to enforce paying COD if they want to pay by credit card. I am curious how other people handle this. I find a number of my suppliers accept credit cards for payment on account in 30 or 60 days (like I am trying to get away with) so I am wondering if this is becoming common practice.

If I am going to give up 3% then I would rather get my money now! Any thoughts?

[juicedinfo]

Hey BarryK
I just started on this forum and I posted yesterday about my merchant deal I just got into. I got an amazingly low effective monthly rate and will be saving a ton of money. If you want, I can get you the info, atleast from that perspective you can keep more of your money in your pocket. I apologize if this wasn't what you were looking for, only how I understood your post. pnblwizrd1@gmail.com

[huggytree]

you shouldn't be losing anything by credit card because that 3% should be added on to your expenses and added to your cost of doing business....time to raise your prices a bit

as far as waiting for payments it all depends on your type of business...in my business I typically give customers 30 days to pay....but im very strict on that 30 days....day 33 and I give a phone call or email.....and I give them weekly until I get paid....day 60 and I go all out and start threatening

[Freelancier]

It's your business. You can set the rules, as long as the customer is aware of the rules, no one gets hurt. If you only want to accept credit cards for on-the-spot payments, then do that and let everyone who pays on terms know that you only accept checks or eChecks once the invoice is a day old.

If you're really concerned about the fees for accepting credit cards, then consider either raising your rates to cover it, adding a "convenience fee" to cover the fees, or stop accepting cards altogether. Those are pretty much the choices, so you just need to figure out which one will work best for your customers.

[Fulcrum]

I'm starting to see many companies charging that credit % back to the customer. There is a minimum dollar amount tied to the extra charge. Make sure you check your local, state, and federal laws before doing something like this though.