Should Your Business Offer Flexible Financing?

One of the many things that you will be in charge of if you own and operate your own, home – based business is billing. You not only do the work or sell the product, you are responsible for creating invoices and processing payments. While keeping track of billing and payments can be a hassle at times, it also puts you in a unique position where you are able to treat your clients a little differently if a situation so requires.

This topic may be more applicable to service – based businesses than those that deal with physical products, but the bottom line is that you are in a position of being able to communicate with your clients and customers about payment terms and conditions. The goal, of course, is always to have plenty of work that you know will be paid for in a timely manner. Sometimes, though, there are friends or other people whom you encounter that need your services and are unable to pay the full amount that they would be required to pay at the time that it would be due under your regular billing terms.

Since you are in control of billing and collecting payments, you have the ability to discuss payment terms with a potential client at the beginning of the business relationship. If you can see that your bill is going to be tough for them to pay, you may decide to offer them a longer – term payment plan or other financing arrangement. While your clients are sure to appreciate that, it is also important that you be careful who you offer such “special terms” to and under what conditions.

I have had both positive and negative experiences with offering “special terms” to clients. On the one hand there are a few people that I knew might have a hard time paying for work that I did for them. I really wanted to help them and I had other work that would pay on time to cover my bills, so I was able to let them pay what they could when they could. These people did not abuse the situation, they sent payments when they could, and if no payments came for a while I was truly able to understand that they were temporarily in a tight spot. These are the people that “special terms” are designed for, and both of us benefit from the arrangement. On the other hand, there are a couple of people that I offered “special terms” to that did abuse the situation. Their bills remain unpaid, years after the work was completed. They are people that I probably should not have extended such an arrangement to in the first place, and I sincerely hope that karma will catch up with them eventually.

As the owner of a home – based business, you have the opportunity to help people when they need it and to offer to let them pay when they can afford it. My only advice is to be careful about who you offer such arrangements to because they can leave you on the short end of things.

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