[consulting] How do you receive payments?

[Evan Leibovitch]

Gerhard Killesreiter wrote:
> As is the usefulness of your mail.
A little civility goes a long way, folks.

The discussion seems to indicate that there is no easy way to do
international payments without letting a service (such as paypal
Visa/Mastercard, etc) take a percentage of the payment. A benefit of
such systems is that they are convenient for the customer (who does not
need to make a trip to the bank or pay extra fees for sending); the
recipient pays 100% of the cost, which is (as has been indicated in
other messages) built into the cost of doing business.

Many of the bank-transfer solutions which have been suggested indicate
that both sender and recipient must bear a cost for this method. Indeed,
such solutions are typically easier for the recipient but more
difficult/costly for the sender. (Even if the actual bank charges are
low -- and they usually are not -- also consider that your client's time
has value, too.) While you as the vendor may be OK with this, it's
usually good for customer service (as well as your collections process)
to make it as easy and obstacle-free as possible for clients to pay you.
You don't want situations in which customers claim they couldn't pay you
on time because they "couldn't get to the bank".

Building in the cost of collecting your revenue -- including, as
required, the resources to chase delinquent clients (as was discussed in
another thread here) -- is not uncommon. Many businesses have dedicated
"receivables" staff.

What I see some businesses do is charge a standard price but offer a
discount for cash payment. That is, if they are not required to bear a
cost (transfers, paypal, credit card, collection staff, etc.) to receive
the customer's payment they reduce the price. Canada's largest
auto-parts retailer offers 4% rebates for cash purchases. I know some
consulting forms that offer a discount if clients pay their invoices
within one week rather than "net 30".

It's all in the balance that you choose between low cost and convenience
(for both vendor and client).

- Evan