I’m not one to procrastinate when it comes to paying bills, yet I’ll admit to occasionally stretching the timeline when it comes to trying out a new service or product — to make sure I’m getting my money’s worth.
But what happens when that timeline isn’t always clear? Getting caught off- guard with an overdue invoice without being informed up front when payment was due can create some unnecessary friction between a customer and retailer.
Talking with precision farming dealers, most are adept at clearly communicating payment expectations with customers. Whether invoices are required to be paid in full within 30 days, or at point of purchase, communicating expectations to customers is critical.
Still, there are problematic customers dealers inevitably have to confront, perhaps as a result of being too lenient with a payment program, or too strict. In either case, frustration emerges on either side of the transaction and can force dealers to make tough decisions.
“It’s a situation we’ve had to work through a few times,” says an independent dealer on the West Coast. “It seems to always happen on the lowest margin products, but we also don’t require payment upfront.”
Short of holding “repo parties” as one dealer put it, more subtle options for collecting delinquent payments can be charging a restocking fee (sometimes 5% of the total cost of the product) or providing an incentive for early payment.
So what approach have dealers found to be most effective timeline for collecting precision payment from customers? Results from a recent online poll by Precision Farming Dealer found that the majority of dealers give customers a maximum 30-day window for full payment.
Second most popular was requiring payment in full at point of purchase, with a handful of respondents saying they allow flexible payment plans based on the purchase amount or the customer.
Ultimately, dealers need to balance persistence with patience to ensure they are getting their money and that customers are getting their money’s worth from their precision investment.