Accounting terms

Dictionary of all accounting terms

What is Payment in Advance?

When a business asks for a 'payment in advance', this means that they want an upfront payment before they deliver their goods or services.

Some merchants require a payment in advance from their customers to protect themselves from non-payment. They may also ask for a deposit equal to a certain % of the total purchase. This is typically done for big purchases.

An advance payment may also be required if the customer's credit score is low, or has a poor financial history.

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