Receive Versus Payment - RVP
Categories: Accounting
Everyone’s going nuts over all of those online meal delivery services, so we decided to try our hand at creating a local version. Almost all of the ingredients in our cook-to-order meals are sourced right here in our home state of Florida, and we only deliver within a 50-mile radius of our food prep facility. So far, it’s going really well. In fact, our sister Delilah is one of our most consistent clients, but we learned a long time ago that RVP is the MVP of any sales we make to her.
What’s “RVP?” It stands for “receive versus payment,” and it basically means that, when we deliver something, we want to be paid, in cash, right then and there. Delilah used to have an awful habit of telling us to “put it on her tab” whenever we delivered her meals, and at first we were glad to oblige, but that’s no way to run a business. Now we’ve got a deal: we won’t give her the food unless she forks over the cash for it when we get there.
We see RVPs a lot in the investment and trading world since they’re a good risk mitigator. Sellers don’t have to worry about a buyer defaulting or not honoring an order if they don’t get what they want unless they pay for it in cash right when they get it. RVPs can also help out buyers, since they’re not shelling out money for something before they actually take possession of it.
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Finance: What is Cash on Delivery (COD)?41 Views
Finance a la shmoop what is cash-on-delivery?
or CoD well if you have a deadbeat buyer who's taken forever to pay you in [Danny Deadbeat laying on sofa]
the past think remember Popeye and wimpy borrowing money for burgers next Tuesday
when he actually never pays you'll eventually have to make that customer
that deadbeat a COD status purchaser well CoD has nothing to do with cheap
fish rather it stands for cash on delivery like you get cash when the good
is delivered and it means that the postal person or UPS gal or FedEx dude
has to collect the cash you are owed before they will actually leave the [Cash transfers to mail people]
package being shipped at the warehouse on your doorstep or van parked you know
down by the river if a client has such bad credit or has such a miserable
payment record that they have to be put on COD status well you may really have
to re-evaluate your relationship there COD also carries charges and often
they're big because a postal worker may have to ring the door eight times before [Postal worker ringing door bell]
finding the deadbeat at home and then even if he is home well it's uncertain
whether or not he'll have the ready cash to pay for whatever goods he just
ordered and sometimes you'd have better odds of getting money out of this thing [Pile of fish appear]