Last week we asked contractors, which do you prefer? Cash or Credit - These are their answers
Check out some of the supporting comments:
Credit for paying my bills to help my cash flow as some clients are slow to pay especially commercial projects and with larger jobs you have a lot of money tied up in production. Cash for collecting money from clients so I don't have to pay fees. On all residential work, we get 30% when you sign your contract even if you have to wait 3 months for us, 30% 5 days after we start your project, and 30% when 3 sides of your home are complete. This way we are not waiting on money.
Cash in hand is better than waiting for credit cards.
save on fees from CC and can pass that on to the customer.
Credit decreases profit in the form of merchant fees.
Cash, no need to worry about it anymore but less funds. Credit, can pay later but if there is any hiccup in payments or production, you could have to pay interest or fall behind in paying it off
Obviously any time customer offers either cash or a credit card I will opt for cash because I don’t have to pay any extra fees. That being said I have found customers who pay with cash seems to think they deserve a better deal as to where customers who pay with credit cards are not looking for any extra perks, in fact customers who pay with credit card tend to pay more (or at least are not looking to try and get you to lower the price). Customers who pay cash have to understand that the money is still going to be taxed accordingly, and as a contractor, the money is still going to be deposited into the business account. Honestly the majority of my customers tend to pay with personal check.
No, unless your going with actual cash to avoid taxes. You still have your overhead.