Deposit up front or net 30 for a new customer?

The Problem: Managing Payment Terms with New Customers

Deciding whether to require a deposit or extend net 30 terms to new customers is a dilemma many finance teams face. The wrong choice can either alienate potential clients or expose your business to significant financial risk. Without a track record, it becomes a guessing game, with decisions often based on instinct rather than data. This can lead to cash flow issues or uncollected invoices, affecting the overall financial health of a company.

Current Practices and Their Shortcomings

Many companies rely on instinct or broad policy guidelines when deciding on payment terms for new customers. This approach often lacks the nuance needed to differentiate between clients who may become reliable partners and those who pose a credit risk. Traditional methods don’t allow for flexibility or adjustments based on how a customer actually performs over time. As a result, businesses might either lose potential work by being overly cautious or suffer financial setbacks by being too lenient.

ARPilot's Innovative Approach

ARPilot tackles this issue by leveraging AI-driven insights to help finance teams make informed decisions about payment terms. By integrating seamlessly with QuickBooks Online and other accounting systems, ARPilot provides a comprehensive view of customer payment histories and behaviors. This allows businesses to start with a deposit or shorter terms for new clients and adjust based on actual payment performance. The platform uses AI to predict customer payment behavior, ensuring that terms are fair and based on data, not guesswork.

Key Benefits and Measurable Outcomes

ARPilot's approach offers several tangible benefits. First, it enables companies to base payment terms on concrete data, leading to more accurate and defensible decisions. By tracking payment behaviors over time, finance teams can reward reliable customers with better terms, fostering stronger business relationships. This data-driven method reduces the risk of uncollected invoices and improves overall cash flow. Additionally, ARPilot's human approval step ensures that customer interactions remain controlled and consistent, preserving valuable client relationships.

FAQ

1. How does ARPilot determine the initial payment terms for new customers?

ARPilot uses AI to analyze customer payment data and history. For new customers, it suggests starting with shorter terms or a deposit and adjusts these based on actual payment behavior over time.

2. Can ARPilot integrate with my current accounting software?

Yes, ARPilot integrates seamlessly with QuickBooks Online through bidirectional syncing. Other systems can connect via REST API, CSV import, or custom adapters under an Enterprise agreement.

3. How does ARPilot ensure the AI does not harm customer relationships?

Every customer-facing action is queued for human approval before sending. This ensures that communications align with your business standards and maintain positive customer relationships.

4. What if a customer disputes an invoice?

ARPilot handles dispute intake efficiently. It automatically pauses collections on the affected invoice, allowing finance teams to address the issue without affecting cash flow on other accounts.

5. How is ARPilot priced for different business sizes?

ARPilot offers a free tier for up to 10 invoices a month. The Starter plan is $99/month, Professional is $299/month with API access, and Enterprise pricing is negotiable, offering flexibility for businesses of all sizes.