Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance
How a Deposit Discount Unlocked a Contractor's Cash Flow
Episode 68 of Cash Flow Conversations dives into a simple but powerful strategy: offering a discount for upfront deposits. Lucas and Luna examine a real case — a mid-sized roofing contractor in Phoenix that was stuck in a net-30 cycle with slow-paying homeowners. By introducing a 5% discount for a 50% deposit at contract signing, the company shortened its cash conversion cycle from 47 days to 12 days within six months. They discuss the math behind the discount, the behavioral economics of why clients take it, and the risk of over-reliance on deposits. Lucas explains how the contractor used…
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