Cash on delivery (COD)
Also called collect on delivery
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is cash on delivery (COD)?
Cash on delivery (COD) is a payment arrangement in which the customer pays for an order when it is delivered or picked up, not on credit terms. Distributors put new customers on COD until a credit application is approved, and move customers with payment problems to COD.
How it works
Payment can be by check, card or another accepted method at the counter or to the driver. A COD account still has an account record; it simply has no credit limit.
Cash on delivery (COD) example
Until his credit application is approved, a new contractor’s orders are COD, paid by card at the counter when he picks them up.
Related terms
- Net termsNet terms are payment terms that give a business customer a set number of days after the invoice date to pay the full amount, such as net 30 or net 60.
- Credit limitA credit limit is the maximum unpaid balance a distributor allows a customer to carry on its account.
- Credit holdA credit hold is a block a distributor puts on a customer’s account, or on a single order, so that nothing ships until the credit department releases it.
- Will callWill call is an order the customer picks up in person at a distributor’s branch instead of having it delivered.
