I’m considering a small 2% discount for payments made within 10 days.
Has anyone tried this approach? I’m curious if it really speeds up payments or just cuts into my income for clients who would pay on time regardless.
2% is way too high for what you actually get back. I tried 1% for a week and it wasn’t worth it.
The problem? You can’t tell which clients would’ve paid quickly anyway. You’re basically paying people who were already going to pay on time.
Here’s what works better:
- Get 50% upfront before you start
- Net 15 instead of net 30
- Solid payment terms in your contract
Being clear about payment expectations beats bribing clients to do what they should already do. Plus you keep your money.
Tried early payment discounts once - huge mistake. I didn’t track which clients actually needed the push vs. those already paying fast. You end up rewarding people who don’t need it and killing your profit for nothing. Way better to just tighten payment terms to net 15 and get deposits upfront. Most contractors I know ditched discounts within a year. You’re better off spending that money on collection calls instead of giving handouts.
Discounts probably won’t help much. Clients who pay on time will keep paying on time anyway - they don’t need extra incentives.
Try late fees instead. Hit the slow payers where it hurts and protect your cash flow.
I just ask for half upfront and rest when done.
Tried 2% for 10 days about two years back. Results were mixed.
Good clients took the discount and paid faster - but they were already paying in 15-20 days anyway. Problem clients? Completely ignored it and paid whenever they wanted.
Six months in, I realized I was just giving free money to people who didn’t need motivation. Dropped it and went back to net 30 with 1.5% monthly late fees after 45 days.
Late fee works way better. Good clients still pay on time, slow ones either speed up or I get paid for waiting.
Discounts can work, but some clients will still take their time to pay even with a price cut.