Service businesses that invoice after delivery often wait days or weeks for payment. Businesses that require prepayment at booking receive revenue before the service is delivered -- which changes cash flow timing dramatically, especially for businesses with multiple daily appointments.
How does prepayment improve cash flow?
Prepayment moves revenue collection from after-service (invoice -> wait -> pay) to before-service (book -> pay -> deliver). For a business with 20 appointments per week, this means revenue is secured days or weeks earlier than with post-service invoicing. Combined with reduced no-shows, total monthly revenue typically increases and becomes more predictable.
What is the difference between prepayment and post-service invoicing cash flow?
With post-service invoicing, the business delivers the service, then waits for the customer to pay -- often 7--30 days. With prepayment, revenue is in the business account before the service is delivered. For a business with 100 monthly bookings at 500 DKK average, the difference can be 50,000 DKK or more arriving weeks earlier each month.
Does prepayment reduce bad debt and outstanding invoices?
Yes. Prepayment eliminates bad debt for booked services entirely -- if the customer paid at booking time, there is nothing to chase. Post-service invoicing always carries the risk of late or non-payment. For service businesses that have struggled with unpaid invoices, switching to prepayment at booking resolves the problem structurally rather than through collections effort.