Everyone knows South Africans don't pay

[flaker]

NOT FAIR

this is not fair. it is so one sided. what about those consumers that are good payers & NEVER get their jobs completed or if completed never satisfactorily. some personal examples of these doings i can easily pen down. and those shysters that that ask for your 50% upfront for materials & use these moneys to pay their o/due accounts and you're then left with making calls and empty promises. i've had my fair share of this.how do u sift the good guys from the bad guys? i acknowledge that all u folks with the earlier postings are good guys
but a first timer using your services with a 70% down payment will have sleepless nights cause he's never sure if delivery of the service he has paid for as promised will ever materialise.

[Martinco]

but a first timer using your services with a 70% down payment will have sleepless nights cause he's never sure if delivery of the service he has paid for as promised will ever materialise.

Very true ! This practice is on the uptake and many people get taken for mega bucks.
I am sure the secret is to do some research first and get references but this is still not a guarantee .

[murdock]

a customer got caught out by a builder who insisted on a deposit...she was using her pension payout to build a granny flat.

what none of us knew was that he had sub ontracted all the work out including the building work...got all the subbies to start and show progress...dumped a pile of rubbish...old planks and stuff on site...put in for the deposit and progress payment...she paid him out R70 000.00 and that was the last we ever saw of him...

he made out like he was christian...blessed and prayed for everyone all the time...that is why i am a firm believer in action speaks loader than words...going to church on sunday doesnt make you a christian...your actions are what make you a christian.

[IanF]

? i acknowledge that all u folks with the earlier postings are good guys but a first timer using your services with a 70% down payment will have sleepless nights cause he's never sure if delivery of the service he has paid for as promised will ever materialise.

Hi Flaker
I have "lost" business because of this deposit practice.
If guys want to know why I just say with over 10 years in the business this is what works for us. I had one person say to me on a R9000 job go ahead here is the deposit, I will check the printing when you deliver and if satisfied pay the balance. We then printed a sample and he was happy and did not want to check the final prints, and paid the balance on delivery. This is easier now when do digital prints but litho prints it take 15-30 minutes to setup a press before you get saleable prints. So litho we print a digital proof which approximates the litho prints and most people are happy with that. What you are guarding against is the customer who wants the impossible and if you have a deposit they are always more reasonable if they think there is a problem. But you can pick up this most times when you are asked for a quote.

[desA]

A useful marker I've used over the years in SA is that of large hot-oil heating devices. The seller uses something like a 60%/30%/10% deposit/ex works/after delivery-commissioning.

Many large projects have to be built with progressive payments. Many have large up-front payments.

In my experience, the vast burden of risk appears to be for the service provider, not customer. If the customer does his/her homework properly, there should be little problem in getting a good product, or result. Everyone has had bad experiences with South Africans not paying their bills. Ask a friend living in London about the reputation of many South Africans. You may not like what you hear.

[Neville Bailey]

I've posed the following question on another business forum, and received some interesting feedback, but I thought I would ask the members here for their input...

A large portion of my income is from Pastel consulting, for which I charge an hourly rate.

Even though my terms are clearly indicated on my invoice as "payment is due on presentation of invoice", the reality is anything but that, apart from a few star clients. In fact, in these tough times, even some of my better paying clients are stretching their payment terms further and further.

So I was wondering if there would be any merit in the idea of me offering my clients upfront hour bundles at a discounted rate, from which they can draw as soon as I provide them with my consulting services, with the proviso that they top up their hour bundle as soon as the existing bundle reaches a predetermined percentage (say 20%) of the original full amount

Perhaps I could even offer a sliding scale of discounts depending on the size of the bundle purchased?

What do you think of my thinking?

Is it an attractive enough incentive to my clients, whilst boosting my cash inflows, minimising potential bad debts, and without eroding my margins too much?

[desA]

Some software houses sell blocks of support hours - in advance. Perhaps in lumps of 8-10 hours.

In your business, this may just work out pretty well.

[AndyD]

Sounds good to me but I would increase you hourly rate buy 15% to cover your extra costs incurred by the epidemic of late payers and offer the old price for bundles paid for in advance. If they're good payers then you can always exempt them from the price increase but I would make them aware that they're getting preferential rates and why.

[Dave A]

So I was wondering if there would be any merit in the idea of me offering my clients upfront hour bundles at a discounted rate

Sounds good

One possible wrinkle is s100 (2) of the National Credit Act:

(2) A credit provider must not charge a consumer a higher price for any goods or services than the price charged by that credit provider for the same or substantially similar goods or services in the ordinary course of business on the basis of a cash transaction.

However cash discounts, advance payment discounts etc. are still happening without much fuss...