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Art -

Quarterly rates can be either in advance or in arrears, depending on what you request from your leasing partner. If you go with quarterly rates in advance, it will work out a better rate factor than a comparable monthly rate factor based on the leasing company receiving 3 payments upfront. If you go with quarterly payment in arrears, the rate factor will be higher than a comparable monthly factor as the leasing company is not receiving a payment until 3 after the contract starts.

My question to you would be what are you trying to accomplish with the different rate structures - are you trying to accommodate a customer request, be more competitive on the payment to your customer or you trying to maximize your revenue? Your leasing partner should be able to put together a structure that will help you accomplish your goals.

If you need any help or have any questions, let me know
nbdv9gr

Actually it's a great topic for discussion, I'm going to call Dennis and see if he can help me with quarterly rates in advance. I'd like to sell quarterly payments in advance to customer so don't have to process as many payments which would thus save them time and money.

I believe I read that the cost to process one invoice is somewhere in the $40 range, can someone clarify?
If the payments are up front quarterly the rates are better than a monthly lease. Advantage to the customer is 4 invoices per year, rather than 12. You can sell the decreased cost of processing and paying 8 invoices. Upgrade timing can be tricky when they are in the middle of a quarter or just paid for a quarter.
quote:
Originally posted by Art Post:
I believe I read that the cost to process one invoice is somewhere in the $40 range, can someone clarify?


There have been multiple studies done on this subject and here's an quick summary of what they said:

The cost to process an invoice varies wildly, from ~$9 at a highly efficient firm to ~$200 at a highly inefficient firm. There was no correlation between the size of the firm, a 2 person firm might be $9 or $200, and same was true with the largest of businesses.

The best rule is to ask the company if they have every done a study to determine the cost of paying an invoice, and hope that they have. Smile
Just caught up with this thread. We have had quarterly in advance rates on our schedule for many years. We usually quote monthly with terms saying quarterly payment. The bigger the company the more likely they will do quarterly and prefer it. The quarterly rates do give a slightly better price than the monthly rate. It is not just three times the monthly rate, although you can easily do that and pick up a little margin.

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