What is cash on delivery (COD)?

Cash on delivery is also referred to as “collect on delivery” since delivery may allow for cash, check, or electronic payment. Cash on delivery (COD) is when a recipient pays for a good or service at the time of delivery. A COD transaction can take several forms, each affecting a company’s accounting.

What is the difference between a cod and a standard invoice?

In a COD transaction, the payment term is cash on delivery, and the total payment is due at delivery. So, with COD, you get paid faster than with standard Net 30 invoices. The primary distinction between COD and standard invoicing is this shorter time frame to delivery, which leads to more immediate payment and improved cash flow.

What is cod delivery & how does it work?

COD delivery also transfers most of the risk associated with sales from the buyer to the seller, and there's no guarantee the seller will ever get paid. In addition, with COD, customers are free to change their minds for any reason and refuse delivery, which results in lost profits and the additional cost of shipping merchandise back to you.