Quote:
Originally Posted by KSig RC
Honestly, is there any reason (besides the small-% cut taken by a CC company, which I believe has already been addressed) why a contractor or 'small business' would take up to TWENTY PERCENT off, other than the 'advantages' afforded by untraceable cash transactions?
Interestingly, 20% would be slightly below the tax burden on that item . . . hm, odd.
"Cash flow" can't be correct, since small businesses almost always live off their credit line for day-to-day costs anyway (and the amount of time needed to make another payment, say check, 'liquid' seems negligible in the grand scheme of things) . . . anything else?
Also, why don't larger businesses do this? Why do many large companies specifically avoid dealing with cash transactions?
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Our business doesn't take a % off, but when I work my A/R's, I can see the advantage. We've had smaller bills that took literally 30 phone calls, plus faxes, letters, etc to collect. It's just irritating fighting with a company over $500, when the majority of our invoices are closer to $50,000. Anymore, we only do work for new companies "COD" - you hand the plumber a check and he'll get to work. The old companies that have had a history of slow payments get an extra 35% or so added to their bills to cover collection costs.
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