Business

How Invoice Discounting Can Be The Right Choice For Your Business

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There are many ways that you could hold onto customers over long periods of time. Some companies will offer discounts to customers who are loyal, and other companies have special events for their customers. You might create a program that offers invoice discounts triggered by certain actions. This is an excellent choice for you if you are trying to make your customers happy, and you can roll out the program using all the tips below.

  1. What Are These Invoice Discounts?

Invoice discounting is a program where you take a percentage off the invoice for each customer when certain situations apply. You must create a program for discounting that will allow your customers to meet these conditions easily, and you might create much more stringent conditions if your customers want a larger discount. You are giving your customers an incentive to continue working with you, and you are creating more cash flow because the majority of invoice discounts occur when your customer has already paid.

  1. The Cash Discount

The cash discount comes to your customers when they pay cash upfront for their orders. You can offer any discount you like, but a traditional discount would be 5%. This discount is taken off the invoice when the customer agrees to pay cash, and you immediately have the funds you need to continue operating your business. If you offer cash discounts, you must make delivery arrangements with your customers beforehand. You could ask customers to pick up their shipments, or you could deliver once the cash is in-hand.

  1. The Early Order Discount

The early order discount is offered when your customers place their next order while you are on the phone. You might have chatted with them about something else that is happening in their business, and you could give them a discount right there so that they do not need to worry about the cost of their next order. Customers who get the early order discount will likely call back early so that they can get the same discount.

  1. The Bulk Discount

The bulk discount that you give your customers only comes when they place massive orders. You should set a level for how large order must be to be considered bulk, and you could give a 10% discount for such an order. You are getting the volume that you need out of the order, and your customer gets a discount that makes it easier for them to shop with you in the future. Ensure that you have the same bulk discount for everyone, and let all your customers know how much more they must order to get the discount.

  1. The End Of Quarter Discount

Your financial quarter closes every three months with a need for inventory reporting, tax filings, and ordering of your own products. Giving discounts at the end of the quarter puts your customers on a schedule that will have them calling the same time every three months for their order. You could give any discount you like to get inventory out of your facility, and you should contact your customers when you know they might want this discount again.

  1. Free Shipping

Free shipping is popular in the retail world, but it is not as popular in the wholesale world. If you give free shipping and handling to your customers for orders over a certain amount, they are more likely to come back and order. You are creating repeat business for your company, and you will find that they will order more often because they know they are getting a discount. You both win in this scenario, and customers often find free shipping to be better than an actual invoice discount.

  1. Do Not Allow Multiple Discounts

You should not allow more than one discount on every order your customers’ place. They might want to get a few discounts at the same time, but you need to limit them to just one. Make the policy very clear, and even offer your customers the best discount if more than one applies. You are giving your customers the service they deserve, and they will be much happier with you because you are. Doing the right thing every time they order.

  1. Conclusion

There are many ways for you to bring more volume to your business, but you cannot do that if you have not offered some kind of discount to your customers. You can ask them to take a free shipping discount, give them a discount when they pay cash or give them a discount when they order early. Each step in the process ensures that your customers are happy, and you will have loyal customers call back to place new orders simply because you are the company that gives them the most value.

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