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36
ACCOUNTING

Collections by Coupon

Encouraging rapid payment and repeat business by stuffing a discount coupon in with invoices.
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JANUARY 1991

Soil Shield International has cleaned up its collections by stuffing a discount coupon in with invoices. If customers pay the invoice within 15 days, they'll get 5% off the next purchase of the company's fabric protector. "If a furniture retailer normally buys $1,500 worth, he sees a coupon worth $75 and says, Wow," says Mike Connolly, president of the $13-million-a-year company based in Fremont, Calif. "Because it looks like cash, it's more attractive than an offer in a letter."

In the four months after the first coupons were offered, the program helped slash average outstanding accounts receivable from 50 to 40 days. What's more, the coupon has encouraged future sales.

Last updated: Jan 1, 1991




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