mooly Posted April 16, 2009 Share Posted April 16, 2009 Hey Guys, I'm am currently suppying all of the information on my invoices to allow my clients pay via BACS, but only a few ever have. Now its not that I hate cheques, or even the fact that I now know the bank staff by name, but it would make my life easyer if they paid via BACS. Now have any of you guys found a good way to get your clients to take the BACS option? I was thinking of maybe a £5/10 discount if they choose to pay via BACS. Now I know some companys that just arent set up this way, but I know at least one of my clients does pay some invoices by bacs. If I did offer this discount, do you think it would be more hastle than its worth to issue credit notes ect. Also I tend to get paid for a months worth of invoices in 1 cheque, so maybe a £10 credit per BACS? Anyway what do you guys think? Jack Link to comment Share on other sites More sharing options...
J Pearce Posted April 16, 2009 Share Posted April 16, 2009 Simple idea I know, but for those clients setup to do so, is it worth simply asking for BACs payment, or putting on your payment details that BACs is preferred. They may just need informing rather than bribing. Link to comment Share on other sites More sharing options...
Guest lightnix Posted April 16, 2009 Share Posted April 16, 2009 Now have any of you guys found a good way to get your clients to take the BACS option? I was thinking of maybe a £5/10 discount if they choose to pay via BACS...A £25 surcharge for paying by cheque might yield better results (if not £25 - not that I've ever tried it). Link to comment Share on other sites More sharing options...
drsound Posted April 16, 2009 Share Posted April 16, 2009 Alternatively a hefty surcharge might really put people off. Some customers might well tell you where to stick it if they do all their business by cheque. We're in the same position with credit cards - I'm not a fan of the system due to the cost and hassle of a merchant account, rolling reserves and whatnot but if we didn't do it we'd lose a few regular customers who like the convenience of popping by at short notice to hire things. I'd ask nicely, a lot of people respond well to that. BACS, especially now that faster payments has given us what the rest of Europe gets, does help with the old cashflow. The reason that many companies insist on paying by cheque is that it means the money is in their account for those few extra days. Might seem like small beer but if you're a mid-sized contractor it could be the only thing that keeps your cashflow stable. Link to comment Share on other sites More sharing options...
paulears Posted April 16, 2009 Share Posted April 16, 2009 My bigger clients love automated electronic payment, but it certainly doesn't mean I get the money any faster! Only one rather old fashioned client now pays by cheque - and this means a trip to the bank, and Lowestoft have a great system where if you don't wish to pay for parking, then forget it - the main banks, building societies can only be walked to - so paying to bank a cheque is really annoying. The weird thing is I now pay all my suppliers by electronic payment too, but I had to ask them for the details - not one offered it without me prodding. Link to comment Share on other sites More sharing options...
themadhippy Posted April 16, 2009 Share Posted April 16, 2009 Also some organisation require 2 signatures on cheques,so even though the accounts department can do a BACS transfer those higher up the food chain see it as taking away a bit more of there control,so dont like it. Link to comment Share on other sites More sharing options...
drsound Posted April 16, 2009 Share Posted April 16, 2009 Even Her Majesty's government wants us to pay electronically these days. I'm quite impressed actually, they're normally 30 years behind the times. Link to comment Share on other sites More sharing options...
Guest lightnix Posted April 16, 2009 Share Posted April 16, 2009 ...I was thinking of maybe a £5/10 discount if they choose to pay via BACS...A £25 surcharge for paying by cheque might yield better results...Alternatively... Some customers might well tell you where to stick it...In which case, you are arguably working for the wrong people in the first place - especially if they consider £25 as "hefty". I can't remember the last time I was paid by cheque for work and I preferred BACS from the start, because...BACS payments don't bounceBACS doesn't take a week to clearBACS doesn't force you to go to the bank, in the rain and stand in a long queue, staring at partition walls and remembering how there used to be counters there, serving people, once upon a time... :PThe fact that cheques DO do all of the above, makes them an inconvenient form of payment, because...They are unreliable*They interrupt your cash flowThey take up your (or somebody's) personal time to processThis incovenience costs Your Business money and should therefore incur some kind of penalty. Simple :P I mean, if I have to fork out an extra £2, because I want to pay the nice people at the exhaust garage by Visa and the Royal Fail can get away with this, then well... ...Surely all you're doing is "emulating the charging models" of other businesses ;) *At least they are in the UK. In Germany, if you sign a company cheque and it bounces, you become personally liable for the amount on it. German company cheques don't bounce very often. Link to comment Share on other sites More sharing options...
Heapsy Posted April 16, 2009 Share Posted April 16, 2009 I think it is worth having a conversation with your clients, chances are because they have always paid you by cheque they consider that to be the simplest option. It is also worth pointing out to them it would probably save them some money on business cheques too (certainly more than the interest they would earn by keeping the money for a few extra days)As I live in town a quick stroll to pay in a cheque is usually a nice break in the day, the problem is when I am away for a long period of time and the cheque is left sitting on my doormat. Link to comment Share on other sites More sharing options...
Guest lightnix Posted April 16, 2009 Share Posted April 16, 2009 I think it is worth having a conversation with your clients, chances are because they have always paid you by cheque they consider that to be the simplest option...How can it be "simpler" to write out a cheque, stick it in an envelope, walk all the way to the post box and back... than to click on a mouse a few times??? :P ...the problem is when I am away for a long period of time and the cheque is left sitting on my doormat.I forgot that one, thanks for the extra ammo :P Link to comment Share on other sites More sharing options...
dbuckley Posted April 16, 2009 Share Posted April 16, 2009 BACS payments don't bounceAre you certain about that? Its many years ago, but I wrote software to work with BACS, and I'm pretty sure that a payment reversal was part of the spec. Electronic money transfer systems in New Zealand are lightyears in advance of those in use in the UK, and thus NZ is virtually a cashless society, but still cheques are widely used for business to business transactions here despite the ease and availablity of electronic options, and despite the presence of a government cheque tax - 2.5c per cheque - to be paid by the payee in advance. To give some idea of what "cashless" means, I've been to the ATM for cash twice this year for cash. I've got a $20 bill in the wallet which may be there for months. Link to comment Share on other sites More sharing options...
Brian Posted April 17, 2009 Share Posted April 17, 2009 I think it is worth having a conversation with your clients,...Absolutely. Ring up and speak to someone in authority in their accounts department and ask to be paid by BACS. You don't say what size your clients are but chances are, in a larger organisation, payments will be prepared by a 'junior' and will simply be on the basis of which method is noted on your entry in their accounting software. Link to comment Share on other sites More sharing options...
drsound Posted April 17, 2009 Share Posted April 17, 2009 ...I was thinking of maybe a £5/10 discount if they choose to pay via BACS...A £25 surcharge for paying by cheque might yield better results...Alternatively... Some customers might well tell you where to stick it...In which case, you are arguably working for the wrong people in the first place - especially if they consider £25 as "hefty".Really? So you'd gladly pay me another £25 on a £500 hire for the convenience of paying by cheque? A 5% surcharge? We'll be delighted to accommodate you at any time my good man! :P This is fine for our corporate clients who take a few thousand pounds worth every time but I'd really rather not chase away our sub-£1k market quite yet. My point was that £25 is a little OTT for the 'hassle' of paying in a cheque. In our business one of us pops down to the bank once a week to pay in a handful of cheques - let's say four on average. This maybe takes an hour of paid time and costs a couple of pounds in fuel/parking/Doughnuts from Gregg's plus whatever the bank takes to pay in a cheque. Am I justified in taking £100 to do this? Why should I charge more to pay in a cheque than I would to stand around for an hour watching some talentless oiks pretent they're Take That? I'm not saying that BACS isn't the best way of receiving money. In fact anyone who think otherwise is, as far as I'm concerned, a numpty. However, I'm not going to penalise my customers for wishing to pay by cheque, credit card or in postage stamps. It's entirely their business if they choose to do that and I'm not going to chase them away for it. Perhaps a more sensible way would be to impose a minimum value on cheques below which they attract a surcharge. Maybe a £100 minimum with a £5 surcharge would do the trick. I can't help but think that a better way is to absorb any costs of running your business in your overheads. Apologies for the slightly ranty mood, I put my back out moving a trailer and I'm p*ssed off! Link to comment Share on other sites More sharing options...
Guest lightnix Posted April 17, 2009 Share Posted April 17, 2009 Really? So you'd gladly pay me another £25 on a £500 hire for the convenience of paying by cheque?If I regarded cheques as convenient (which I don't) then I suppose I'd just have to. If the goods and services you supply are of high enough quality, then I'll just have to accept the charge, in return for being given the flexibility to choose the method of payment. I already pay a surcharge on many card transactions, which vary according to the type of card used. Why should it be any different for cheques? To give some idea of what "cashless" means, I've been to the ATM for cash twice this year for cash. I've got a $20 bill in the wallet which may be there for months.Following the cloning of my debit card the other week, I'm paying for far more items in cash now. Link to comment Share on other sites More sharing options...
drsound Posted April 17, 2009 Share Posted April 17, 2009 Exactly my point, I don't see why you should have to pay a surcharge for using your chosen method of payment. We never charge even for credit cards. We'll do our best to persuade people otherwise of course but if they insist then so be it. Would you pay the extra 2.5% at the supermarket or petrol station? On the receipt they used to tell you how they were chraging you 2.5% (or whatever) but then discounting the total to make up for it. Cash is good, I like cash. I can understand why a lot of places don't like taking it for high value transactions though. Link to comment Share on other sites More sharing options...
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