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?
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