From: | Anthony Z. |
Sent on: | Monday, June 10, 2013, 10:54 AM |
Tony,So, most of my clients have to chase receivables with 30-45 day terms, so your advance billing really puts you in great shape!Now, since you are hitting your client's credit cards, and since hopefully you can get the billing system modified long-term, remember that your clients are likely uploading the cc charges electronically, and since you seem to be largely charging the cards quarterly, I don't think the "randomness" you are concerned about will be as big a deal as you fear. Keep in mind, since you are billing and collecting in advance, both you and your clients will have to account for this as prepaid revenue/prepaid expense, so they can set up an automatic accrual, leaving just the cc reconciliation (and cash) to manage your "random dates".As for the timing, since you are already getting paid in advance, as was mentioned, you can change your terms to 75 days. As for "chargebacks", depending on your overall volume, could you just set up an auto reminder at 60 days from a sales/cust svce perspective -- hope you are loving the service...... we will be charging the next quarter in two weeks.... If you do not wish to continue the service, please let us know by then....?I am also a bit confused as well over the free days -- if your contract terms indicate the timing, then when you hit their cards is an accounting issue only -- the charge should relate to days[masked] regardless of when the card is hit, so you only have a risk of loss for clients that cancel late (and based on your terms you decide not to pursue a prorated charge) or become bad debts.Lastly, can't you charge those who lapse as a one-time charge when they "cure" and not another autopay just like you do when the firs subscribe? You can certainly reflect paying for any prior days service in the "late renewal" terms...Thanks,
David
David TodrinPresidentDavid Todrin ConsultingCFO Services for the Entrepreneur
(203)[masked]
[address removed]
http://www.linkedin.com/in/davidtodrin
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