26
Pro tip: I picked a 10-day payment window over 30 days for a client in Austin.
The client offered a 5% discount for faster payment, so I took it to improve my cash flow last month. It worked out because I got the money before my next materials order was due. Would you ever give a discount for quicker payment on a residential job?
3 comments
Log in to join the discussion
Log In3 Comments
ray_king2mo ago
Oh man, absolutely I would! I did that exact thing on a kitchen remodel last fall. Offered a 3% discount for payment within a week of finishing the punch list. The client jumped on it, and that cash hit right when I had a big lumber bill coming due. It's a great tool when you need to smooth out your cash flow. Just gotta make sure the math works so the discount doesn't eat up all your profit.
6
skyler_kim15d ago
just gotta make sure the math works" is where I gotta push back. Offering 3% off to get paid a little faster, that's leaving money on the table you already earned. I'd rather take that same 3% and put it toward a factoring line of credit if cash flow is tight. Way better to borrow against what you're owed than give up profit for early payment. Clients who jump on a discount like that are usually the ones who would've paid on time anyway. You're basically rewarding them for doing what they were supposed to do.
1