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Most efficent way of billing

     
4:08 am on Jan 10, 2003 (gmt 0)

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Alright this will be my last "newbie" post, I swear.

Basically I have a web design business, however up until now all of the work we have done has been within the state, and the customers have paid by sending a check through the mail.

Sure that way of receiving payments is good for businesses that are not that far, but my question is what is the best way to receive payments from customers in other states or on the other side of the country (USA)? Please just give me some information on this, I want to expand my business as much as possible. Thank you.

2:38 pm on Jan 10, 2003 (gmt 0)

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Hi MWpro

Ask as many questions as you want, that's what we're here for :)

Why not just continue the same system, where the client mails you the check?

2:56 pm on Jan 10, 2003 (gmt 0)

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Here's my advice. It's gleemed from 8 years in this business, and all the baggage that goes with it.

Accept Credit Cards.

Our primary method of payment is by Credit Card. Occassionally, we'll have customers that will pay by check, but we always ask for the Credit Card up front.

Why? Because over those long years we've had our fair share of "payment issues". Customers who wait 3 months to pay; don't pay until you've harrassed them several times; or decide they don't really want a web site after all.

Sometimes they're deadbeats. Sometimes they're just busy, and honestly forget to mail the check. Sometimes they've hit a cash shortage due to some other factor of the business, and they can't afford to pay right away.

In the end, however, you're a developer, not a bank and not a credit lender. Their financial issues aren't your problem. That's why credit card companies exist. Let them pay you, then they can figure out how to get the cash out of the customer. We bill 50% at the start of the project, and the remaining 50% at completion. That way, we always get paid.

Yes, you will lose some of the total price to the discount rates on the credit card transaction, but compared to losing 100% to customers who skip out on you, or wait 180 days to write that check, it's a small price to pay.

4:43 am on Jan 11, 2003 (gmt 0)

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That is some good advice chameleon, thank you. I will definately persue paying by credit card... any tips on how you actually go about billing their card?
9:33 am on Jan 11, 2003 (gmt 0)

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The billing depends on your contract.

If it's for a fixed price, then you should bill 1/3, 1/3, and 1/3 with each third being paid upon the completion of a contract-specified benchmark.

This is better for you, as you get paid 66%, rather than 50%, of the total upon hitting the halfway mark.

My clients are always happy with this arrangement because 1/3 is less threatening than ONE HALF. Everybody's happy. A win-win situation.

If you are billing by the hour, then specify that they must pay you within one week of invoicing them. Or two weeks if you're comfortable with that.

6:38 pm on Jan 11, 2003 (gmt 0)

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The 1/3 concept is definately a good idea, thank you.

I mean more along the lines of, they want your services, they have a credit card so they can pay, but how do you actually get the money from the card? Do you need like a 3rd party credit card service to charge them or how does it work?

1:07 am on Jan 12, 2003 (gmt 0)

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any tips on how you actually go about billing their card?

Personally, I use QuickBooks Pro. You can register right through them to accept credit cards. It's a fairly easy process to sign up, and Wells Fargo is the actual back-end processor.

I require a credit card number when the client signs the contract. I bill 50% of the total on the day they sign, and 50% of the total when I release the web site.

No fuss, no muss!

6:50 pm on Jan 12, 2003 (gmt 0)

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Presently, I use PayPal to accept payments from my clients who don't live locally (those ones pay by check).

When I send my client a statement in an email, I mention the Payments page on my website. They can go to the web page and click on:
Pay $100
Pay $200
Pay A Specific Amount
Pay Monthly Maintenance Plan
Pay Website Review

So I let PayPal handle the security issues. They charge about 3% for this - to me, well worth the hassle.

When I get the payment notification by email, I continue working for the client.

So far, so good, I have been doing this plan for 6 months.

Pacific

 

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