Deferred Billing

A A A

DEFINITION

The act of charging buyers for their purchases, without interest, at a later date. Deferred billing is most often used as a sales promotion technique, enticing potential customers to purchase big-ticket items now rather than later. Car dealerships and those that operate in the "luxury" markets usually offer deferred billing.



INVESTOPEDIA EXPLAINS

From a retailer's standpoint, deferred billing not only increases the buying power of a new or existing customer, it also gives that buyer time to realize they "can't live without" the product purchased. Deferred billing can affect a company's income statement and balance due to revenue recognition differences.




RELATED TERMS
  1. Price Protection

    A little-known, but common feature offered by most credit card companies that ...
  2. Accounts Receivable - AR

    Money owed by customers (individuals or corporations) to another entity in exchange ...
  3. Credit

    1. A contractual agreement in which a borrower receives something of value now ...
  4. Deferred Charge

    A prepaid expense that is treated as an asset on a balance sheet and is carried ...
  5. Marketing

    The activities of a company associated with buying and selling a product or ...
  6. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding share of common ...
  7. Working Capital

    This ratio indicates whether a company has enough short term assets to cover ...
  8. Billing Cycle

    The interval of time during which bills are prepared for goods and services ...
  9. Amortization

    1. The paying off of debt in regular installments over a period of time. 2. ...
  10. Price-To-Cash-Flow Ratio

    The ratio of a stock’s price to its cash flow per share. The price-to-cash-flow ...
Related Articles
  1. How Credit Cards Built A Plastic Empire
    Credit & Loans

    How Credit Cards Built A Plastic Empire

  2. The History Of Consumer Credit Rights
    Credit & Loans

    The History Of Consumer Credit Rights

  3. The 4 Basic Elements Of Stock Value
    Markets

    The 4 Basic Elements Of Stock Value

  4. Free On Board
    Professionals

    Free On Board

  5. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  6. An Introduction To The CMA Designation
    Professionals

    An Introduction To The CMA Designation

  7. How Return On Equity Can Help You Find ...
    Economics

    How Return On Equity Can Help You Find ...

  8. Top 4 Most Competitive Financial Careers
    Professionals

    Top 4 Most Competitive Financial Careers

  9. 4 Leverage Ratios Used In Evaluating ...
    Fundamental Analysis

    4 Leverage Ratios Used In Evaluating ...

  10. Operating Profit
    Investing

    Operating Profit

comments powered by Disqus
Hot Definitions
  1. Identity Fraud Reimbursement Program

    A financial product that offers reimbursment for the costs associated with having been a victim of identity theft. These costs may include getting affidavits notarized for police and financial institutions, postage for sending certified mail to police and financial institutions, lost earnings resulting from time spent recovering one's identity, and legal fees.
  2. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  3. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  4. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  5. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  6. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
Trading Center