Rule One of Business: Get Paid
Getting paid, you would realise is essentially fundamental to your business because if you don’t get paid, what’s the point in business?
You might be surprised at the amount of business people who only get their customers to simply pay when and if they remember it. I am acquainted with a businessman who continuously gets bad debts like weeds. Why is that? Simply because he cannot bring himself to ask for the cash and people can just overpower him.
If you let someone credit, only do so if they cleared their worth to you by paying cash on delivery (COD) for a time. Moreover, you need to check whether they have the funds to pay you - if they don’t then you shouldn’t do business with them. Don’t push yourself into saying “I need the work” or “I need the sales”. It’s ultimately to do the work or providing the goods for zero if you do not get paid.
If you are the sort of person who can’t request the fee after the service has been completed, try these cheats:
Tell your client that when the work is done, you will need cash or cheque. They should more than likely have it there at the transacation and you don’t have to demand your pay.
When sending out your quote, make sure your payment terms are understandable.
Do up an invoice that has your terms of payment simply stated and hand the client the invoice when the job is finished. They will see the invoice and reactively know they have to pay it off now without you having to say a word. Invent a “cruel boss” who will flay you alive if you don’t go back with the pay for the job.
Ask your bank branch to set you up with Merchant facilities so you can use credit cards for example Mastercard and Visa. The large majority of people possess credit cards and it should stop the problem of the client not owning a cheque account or not having the cash in their pocket.
Moreover, don’t be asked not to hold any goods til you’ve been paid. Remember, until they have been paid for, they still remain yours.
If you decide to allow a customer credit, make sure you have the following contact details about them a week PREVIOUSLY you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
When you take all this detail, call the branch and make sure that they have an account then. Then, telephone all of the trade reference and find out if they pay their debts on time or if they have had any difficulties 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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