Posted in Marketing and Strategy Terms, Total Reads: 506
Definition: Deferred Billing
Deferred billing refers to the process by which a vendor agrees to sell goods to the customers without charging him for the same at that point in time. The customer is allowed to pay later and moreover, does not have to pay any interest on the time period lapse. In other words, goods are advanced to the customer on credit
Deferred billing often comes under the head of trade promotion in marketing whereby distributors and retailers can stock on an item and push its sales. Deferred billing can also be extended to end customers (individual buyers), thus encouraging them to buy higher value items now and pay for them later. The act of extending the deferred billing system to end customers comes under sales promotion. The main reason for deferred billing is to increase the purchasing power of the customer.