excellent question and answers! right on the $$ We use a net 30. however, as an incentive ,
we discount up to 18% if we get paid in less than 25 days. the cool thing is, you can use this as a sales tool. also we use a factoring company for a portion of our receivables. I think I like the 7% in 30 days or less! errr...Im loosing money :) lol
Sure, It is very simple you bill for a set amount. Lets say you charge $150.00 to do a lock change. Now the bank wants to know how much of a discount you will give them off of you fee of $150.00.
Some companies discount the service charge 15% or less. That would mean that the paying party (Bank or ?) would subtract 15% off of your fee for the services you provided. So they would pay you $135.00 for these services.
Now to get a better discount I personally would want to be paid faster so I would offer a better discount. The key is to remember how fast you get paid is it worth the discount for the business you receive form that customer.
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