Paying Up Front Or When They Pickup?
Business By ChristysCakes88 Updated 9 May 2010 , 11:05pm by MCurry
I just run my business(if you want to call it that lol) out my home so I am not relaly a business savvy person. Do you make clients pay for their cakes when they order them? Or do you make them pay half and then the other half at pickup/delivery time? Or do you let them pay all of it at pickup/delivery time? Just curious what everybody else out there is doing! Thanks!
I picked a dollar level of $75. Anything under $75 could be paid in full at time of pickup. Anything over $75 required a 50% deposit with final payment due at time of pickup.
Wedding cakes had to be paid in full 2 weeks prior.
Commercial clients (businesses) had to give me a company credit card or issue a check in advance. I had a SHORT list of commercial clients who I permitted to be on Accounts Receivable, meaning I rec'd a 50% payment up front and the other 50% would be sent to me from their accounting dept within 30 days from delivery. (Like I said .... this was a SHORT list of catering clients!)
You'll get lots of ideas and suggestions, but bottom line is you pick a method that works best for you and how you choose to operate. 
I get a deposit on all of my cakes. For all occasion cakes the deposit holds the date and the balance is due a week before delivery or if its not much of a balance I have taken it at the time of delivery. Wedding cakes always a deposit and the balance is due 3 weeks prior.
Payment in advance three weeks before or the oven doesn't get turned on. If it was a last-minute order and I still felt like doing it, I'd require payment in cash in advance, no bouncy bouncy checks, thank you very much.
I learned the hard way, when I got stuck with cakes that were never picked up. Full payment for all cakes under $100 and 50% deposit for cakes over $100, with balance paid at least 1 week before the event.
I have only run into two customers that said, I don't want to pay upfront and I kindly told them that is my policy.
Thanks so much for the advice ladies! I am going to give it a try with clients paying 50% at the time of the order and then the other 50% at pickup/delivery time. I am just worried lately that with the economy like it is that people won't show up to get their cakes. Thanks again! 
I dunno, I think with the economy most people aren't going to leave you with a deposit and not pick up their cake. haha.
I have a more "risky" method than some but so far its worked great.
I take a $50 deposit to reserve the date and the rest is either payable 10 days in advance (if a delivery) or in cash when they pick it up (or can pay online before pickup if they want to use plastic).
I always confirm the cake the week in advance too. Ever since I started doing deposits several years ago, I've never had anyone stand me up, and I've only had two people back out (before I made the cake) due to problems and I kept the deposit.
So its worked for me, I guess, so far! I chose the $50 deposit so that it would not "break" the customer if something did come up and cause them to have to cancel. I realize part of that is to atone for any orders you have to turn down on their account...but its okay for now.
I require payment in advance via PayPal. I give the client 48 hours to make the payment, during which time I will not give up their date to another customer. Since I started this, I haven't had any problems with payment.
This policy has evolved over the last couple of years. When I first started, I accepted payment upon delivery, but after I had to chase payments down from customers several times, I went to the advance payment via PayPal system. I had to institute the 48-hour rule when several customers didn't pay their bills after a week or more, and didn't tell me they had changed their minds about ordering from me until I called them to remind them to pay.
I don't do wedding cakes, so my cake orders generally are not very high-dollar, which is why I do not do deposits.
All cakes under $399 must be paid for in full prior to delivery. Anything over, a deposit of $300 or 50% of the order whichever is higher when they order then balance due 2 weeks prior to event. No exceptions. And I do not accept checks. Cash or Credit cards only.
I too learned the HARD way. Payment in advance for small events (under 150.00) wedding cakes/large events 50% deposit remaining 50% due 1 month prior to event. Equipment deposit also due with final payment.
50% down at order and 50% at delivery is a good practice. Also, determine if they cancel what if any you will refund and put in writing on your invoice at order. This may depend on when they cancel (i.e. 3 days or less before delivery which is likely you have purchased items and began making sugar paste flowers.).
Do what's right for you.
Melanie
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