Developing Incentives for Early Client Payment (2/10 Net 30, 3/7 EOM, etc.)
A lot of companies view the hiring of professional bookkeepers and accounting services as superfluous and unnecessary. But there are benefits that extend beyond simple convenience that are causing an awful lot of small, medium, and large companies to rethink their stances on what’s becoming a rapidly in-demand service.
One of the benefits of outsourcing internal bookkeeping duties to professional accounting services is that you can take advantage of a number of little-known best practices. Here are a few examples of those best practices that you can use in your accounts receivable that will give your customers incentive to pay early.
· 2/10 Net 30 – Establishing these payment terms with your customers will give them the opportunity to save money while ensuring that your business is paid in a timely manner. This is an addendum to a standard Net 30 account that specifies if your customer pays within 10 days, they’ll receive a 2 percent discount on the total owed.
· 3/7 EOM (End of Month) – Operating under the same principles, this agreement states that your company will give a customer a 3 percent cash discount if they pay in full by the seventh day of the following month instead of the seventh day of the second month, when the bill would normally come due.
· 2/15 Net 40 ROG (Receipt of Goods) – Some companies pay on Net 40 terms, which means that it could be some time before an invoice you’ve billed to a customer is finally paid. This arrangement offers those same customers the option of collecting a 2 percent discount if they pay within 15 days of the date on the invoice.
The above mentioned accounts receivable best practices aren’t trade secrets, but they are just a few examples of some of the practiced and effective methods that professional bookkeepers can bring to your company, which can in turn positively impact your cash flow. To learn more about the benefits of hiring outsourced accounting services, visit AccountingDepartment.com.
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