Question
We have face based attendance solution. The pricing is user based licenses. The B2B customer has to buy as many user licenses as the number of employees who will enroll themselves for daily attendance. The total deal is of $20000 for 1 year. We have to provision the system, provide support etc and hence we ask for 50% advance payment. The remaining is paid on a monthly basis. The CIO wants to understand why the advance payment is required even before we start. Seeking clarity to understand from the community that what are the convincing reasons to ask for advance payment from a B2B customer for any cloud based offerings?
Answer
If the reason you're charging the advance is to cover setup costs, why not position an initial pre-payment as a one-time setup fee instead of an advance payment? This is common and would be less likely to generate push-back as a payment timing negotiation.
