Afterpay is currently sweeping the retail landscape across Australia. In brief, Afterpay is an online checkout service whereby the customers buy the item and pay for the purchase over four equal interest-free fortnightly instalments (similar to a layby system but with Afterpay the consumer recieves the goods upfront). If the payments are made in full and on time, customers only pay the price of the item purchased. Additional costs are only incurred by the customer if they do not make the required fornightly payments in full and on time. In this circumstance Afterpay charges the customer a late fee(s).

Afterpay aims to convert customers that would have otherwise abandoned a retail purchase due to budgeting or cash flow concerns, thus generating more sales from retailers existing customer base and even creating new customers for the retailers themselves. The purchase amounts are settled with the retailers up-front and no customer risks are passed on to the retailers.

If you are considering Afterpay or require assistance in application, liason & integration of the Afterpay services into your business, or which to discuss the accounting treatment of such sale methods, contact GMD Advisory's Business Services team to arrange a free consultation to gain a more in depth overview of the benefits of offering Afterpay to your customers.