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For new customer the term of payment can be use as can and CDC.
For a large vaued offer the suitable option for a new client is LC in the best interest of both the parties.
all can be used as guarantee of money guard but it will selected based on the method preferred from company , in my opinion
letter credit(lc) is the best one , the bank in the way has to guard your money till maturity date it can not be modified without notice you
ON LC is good because customer get time arrange fund
Thanks
I prefer to wait for more answers from colleagues
If its well reputed company 'PDC' can accept or if its stranger 'Demand Draft' will be the better option.
Conditions of payment agreed between a buyer and a seller for goods sold or services rendered. Three basic terms of payment are (1) cash, (2) open account, (3) secured account.
Payment terms are the arrangement that you have with your creditor for repaying the obligation to them. For example, if you borrow $100 USD, and you agree to pay back within 30 or 60 or 90 days with a percentage of interest or no added interest.
Invoicing tips from other small businesses
Just about every small business struggles with invoicing. A study of our users found that:
It doesn’t matter where in the world we run this study – or who among our 860,000 small business subscribers we ask – the results are essentially the same. Small businesses have a hard time getting paid.
However, things are changing. Business owners are taking clever steps to improve their invoicing process and get paid quicker. We asked 1,500 business owners for their tips and tricks – and looked at changing habits among Xero users – to bring you advice on invoice payment terms and best practices.
You have more control than you think
If a client doesn’t want to pay on time, it’s hard to make them. For that reason, many business owners feel powerless to improve the speed of payment. However, if you focus on the things you can control, there’s still a lot you can do to get paid faster.
Your invoice payment terms can set the tone for the whole transaction. But you can also improve your chances of prompt payment by invoicing quickly, communicating clearly and reminding clients when they owe you.
Invoice payment terms
Invoice payment terms spell out how you expect to be paid, and might include details like:
But perhaps the most important payment term of all is the due date. When do you expect to be paid? Businesses used to always give 30 days but this is changing.
Long payment terms are an old-school hangover from the days of snail mail and payment by cheque. But now that businesses send online invoices and most payment is electronic, 30-day terms are obsolete.
If you're serious about the work you do, and you hustle to meet your clients' deadlines, there's no reason why you shouldn’t be paid within a week.
Short payment terms are common You needn’t feel bad about giving shorter invoice payment terms. Most small businesses do it now and expectations are changing. Our study found that:
Get clients on the clock quicklyIt doesn’t matter how short your invoice payment terms are if you don’t send the bill on time. Whether you give 30 days to pay, or just seven – the clock doesn’t start ticking until the invoice is out the door.
Invoicing can be a pain. Other commitments and interruptions get in the way. As a result, most businesses only send invoices once every 2-4 weeks. But when you delay, you’re essentially pushing back your payday.
Try to use templates that speed up invoicing. Then you can pull up a fresh invoice, punch in the job details and costs, and send the bill quickly. A lot of software packages can do this. Some allow you to do it from your smartphone, so you can send invoices when you’re out of the office.
Chase payments Don’t wait until an invoice is two weeks late before reminding a client they owe you. Try sending a friendly email as the due date approaches. Follow up again if they go past due.
If clients don’t respond to emails, pick up the phone. Don't let it drift. It may not be the funnest part of being in business – but it could help you stay in business.
If you don’t have time for all the follow-up, consider:
Top seven tips to get paid faster
Getting paid and having a healthy cash flow is the lifeblood of every small business, but it’s not always as easy as sending an invoice. The 1,500 businesses that spoke to us about invoicing offered these practical tips:
Creating an invoicing system that works
You may have made your first invoices in a standard software package like Microsoft Word. Maybe you even had to search the internet for tips on how to create an invoice.
As you grow, however, a business’s invoicing needs become more complex. Think about how you can create a system that incorporates these tips, speeds up invoicing, and improves cash flow into your business.
Invoicing software can help. As a bonus, it generally comes as part of an accounting package, which means your books are automatically updated as invoices are issued and paid.
Learn more about invoicing features on Xero’s accounting software
What startups should know about invoicing
Hindsight is a wonderful thing. Most people don't know a great deal about invoicing when they start their first business, so it's good to learn from people who have already been there.
Businesses we spoke to said they initially underestimated how much time invoicing would take up. You can spend up to 10 percent of your work time creating, sending and chasing invoices. That can cause a drag on your other administration work, so be sure to factor this into your planning and accounting strategies – and set up the most time-efficient systems you can.
If you sell big-ticket items or expensive services, consider offering clients split payments. All businesses have to manage their cash flow and your clients are no different. Partial payments can make account reconciliation a little trickier for you, but it makes it easier for people to spend money with you – which is a good thing. Just make sure clients quote the correct invoice numbers on every payment they make.
Adjust invoice payment terms and look at your whole system
Being a small business owner often means you’re short on time, but it’s worth making the effort to get your invoicing set up properly. Having a process that helps streamline invoicing can drastically reduce the amount of time you spend collecting your hard-earned money. And that’s got to be great for your business.
My preference is " Cash" Collection for the first time. if they have more business for us then we need to create a credit application and finalize terms
Would love to gain knowledge from experts.