If you are a SaaS company, how do your customers pay you? Credit, ACH, etc, monthly vs. annual contract. Any good resources on the subject?
Ask HN: How do your enterprise customers pay you?
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Re: Ask HN: How do your enterprise customers pay you?
#2As always, I'm happy to meet for coffee in SF with any founders who want to talk about SaaS sales in detail. I was the first sales hire at PagerDuty. Email in profile.
To start to answer, do annual deals whenever possible. Large companies want to pay once a year via ACH/check/wire rather than dealing with credit card payments and expensing, etc. Often times credit card payments are prohibited (though that rule is often ignored). Money up front is key for the business.
Re: Ask HN: How do your enterprise customers pay you?
#3Let define "enterprise customer" first. This is someone for whom the terms, conditions and prices of your website do not apply. Enterprise customer = Ask for quotes. So you might delay the question of how they pay you, once you have an enterprise customer ready to sign.
An other distinction is, that you might charge accounts of normal customers, but you always just send an invoice to an enterprise customer, and they send you the money. German customers could use the old BLZ routing, European the IBAN routing, and US will use ACH. But I don't care, as long as I get my money on my account. Big companies are slow payers. My trick of getting the money fast is to offer 2% discount, if they pay within 7 days.
Re: Ask HN: How do your enterprise customers pay you?
#4This will vary by contract size and type, but for us, it's a split down the middle of monthly check or wire on annual contracts. In our experience there is a line somewhere around $1000/month where credit cards aren't commonly used.
Re: Ask HN: How do your enterprise customers pay you?
#5>$1k/month is by wire/cheque. Below that is credit card.
Re: Ask HN: How do your enterprise customers pay you?
#6We sell to large healthcare companies for anywhere from $1,000's to $100,000's and it's almost exclusively checks in the mail.
Re: Ask HN: How do your enterprise customers pay you?
#7I'd say it very much depends on the country and the price range.
In Germany for example by the far the most common method for business payments is invoice / bank transfer. Up to a certain amount (about €500) credit card payments are accepted, too though (because that's what middle managers in larger companies commonly are allowed to spend on their own account without asking for permission).
In the US paying with credit card is much more common even for business.
Then again, enterprise pricing can easily exceed the usual credit card limits.
Larger companies like to pay annually, smaller ones especially startups are more likely to pay monthly for obvious reasons.
Re: Ask HN: How do your enterprise customers pay you?
#8Let define "enterprise customer" first. This is someone for whom the terms, conditions and prices of your website do not apply. Enterprise customer = Ask for quotes. So you might delay the question of how they pay you, once you have an enterprise customer ready to sign. An other distinction is, that you might charge accounts of normal customers, but you always just send an invoice to an enterprise customer, and they…
> My trick of getting the money fast is to offer 2% discount, if they pay within 7 days.
Great tactic. The reason this works, in some cases, is NOT because the company cares about a measly 2% of whatever they're paying, but because they may have a policy that says they _must_ accept discounts if available.
Re: Ask HN: How do your enterprise customers pay you?
#9Let define "enterprise customer" first. This is someone for whom the terms, conditions and prices of your website do not apply. Enterprise customer = Ask for quotes. So you might delay the question of how they pay you, once you have an enterprise customer ready to sign. An other distinction is, that you might charge accounts of normal customers, but you always just send an invoice to an enterprise customer, and they…
Marking invoices with 2%/7 NET 30 or any variation thereof is definitely a great practice.
The shorthand means X% discount if paid in Y days, with full amount due in 30.
Re: Ask HN: How do your enterprise customers pay you?
#10My experience is that this largely depends on the procurement practices of the company and whether or not your price range is low enough to be below discretionary expense limits.
The greatest feature of SaaS has been the ability to take a 50k software package and make it a 500/month subscription that people who actually need it did not have to go through the official procurement process and could simply expense it.
From the orgs where I worked, $500 to $1000 per month seemed to be the usual limit for expense items, depending by company size and the position of the person expensing it. CTOs typically can get away with a lot more...