Down payment and payment in advance

In addition, the effect on your cash flow is excellent because you get paid before you have to pay your own suppliers.
The only problem is that this mode of payment is very restrictive for your customers especially if they are in a precarious financial situation with tight cash.
Under these conditions it will be difficult to establish sustainable business relationships. That's why it is sometimes better to request a "partial payment in advance" also called a down payment. The order amount percentage of the down payment depend on the credit limit allowed to your customer and the commercial negotiation.
The payment in advance

This is a document similar to a quotation. It allows the buyer to justify an outflow of money to the seller when the final invoice is not issued yet.

The down payment
Less restrictive for the buyer and less safe for the seller (only part of the business offer is paid in advance, usually between 20% and 50%), the down payment is very interesting for companies who request it systematically to their customers. It contributes to reduce the risk, the daily sales outstanding (DSO) and the working capital requirement.If your client is unwilling to pay you a deposit while you have not yet delivered (he is not sure that you will deliver the material. Paying an advance is a risk for the buyer), offer him to implement in his favor an advance payment bank guarantee. In case of problem (unfulfilled commitments of the seller), he will be easy for him to get back his money without delay with this guarantee. See our models of advance bank guarantees below.
Next step : Delegation of payment →
Tools download:
Template of advance payment bank guarantee on demand.
This kind of guarantee is often requested by the seller in order to make sure he doesn't lose the advance payment in case of dispute.
This kind of guarantee is often requested by the seller in order to make sure he doesn't lose the advance payment in case of dispute.
Template of advance payment bank guarantee on demand.
This kind of guarantee is often requested by the seller in order to make sure he doesn't lose the advance payment in case of dispute.
This kind of guarantee is often requested by the seller in order to make sure he doesn't lose the advance payment in case of dispute.
Down-payment request letter template which asks to the buyer the payment of an advance as his credit limit cannot be extended.
It also informs the client that his order will be proceeded once the payment received.
It also informs the client that his order will be proceeded once the payment received.
Prepayment request letter template to be used when the seller wants to get the full payment of the order before delivery.
Down-payment request letter template in french which asks to the buyer the payment of an advance as his credit limit cannot be extended.
It also informs the client that his order will be proceeded once the payment received.
It also informs the client that his order will be proceeded once the payment received.
Prepayment request letter template in french to be used when the seller wants to get the full payment of the order before delivery.
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