Rule One of Business: Get Paid
To get paid, like you would realise is essentially important to your business because if you are not being paid, why are you in business?
You would be astounded at the heaps of business people who permit their customer base to simply pay when and if they remember it. I know one business owner who repetitively holds bad debts like awards. Why, do you think? Very possibly because he won’t bring himself to take the money and people can just use him.
If you let someone credit, do it only because they have cleared their integrity to you by paying cash on delivery (COD) for some period of time. Secondly, you must see whether they have the cash to pay you – if not then do not do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s fruitless when you do the service or providing the goods for nada if you aren’t getting paid.
If you are the type of person who can’t request the cash when the service has been done, try these cheats:
Tell your client that when all the work is completed, you will require cash or cheque. They should more than likely have it ready at completion and you will not have to request your payment.
When you hand out an initial quote, be sure your payment terms are clear.
Create an invoice that has your terms of payment plainly stated and give the customer the invoice when the task is done. They can review the invoice and reactively realise they can pay you the fee now without you being required to say a word. Fabricate a “cruel boss” who might skin you alive if you don’t bring back the payment for the service.
Arrange with your bank branch to have you running with Merchant facilities so you can have credit cards for example Mastercard and Visa. The majority of people utilize credit cards and it can fix the problem of the customer not holding a cheque account or not having the right cash on hand.
Moreover, don’t be asked not to hold any goods til after you’ve been paid. Understand, until the goods are paid for, the goods remain to be yours.
If you choose to allow a client credit, be sure you have got the following details about them at a point PREVIOUSLY you permit them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you take all this detail, call the branch and make for sure that they have an account with them. Then, contact every trade reference and find out if they pay their invoices consistently or if there have been any problems with them.
Most people will be willing to tell you if the person is troublesome. If everything is OK, allow them a moderate level of debt, say no more than $500 (depending on your business). Monitor the operation of the account for a few months before allowing this amount to be exceeded.
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