Rule One of Business: Get Paid
Being paid, as you would realise is vitally fundamental at your business because if you aren’t paid, what are you doing in business?
You would be astounded at the heaps of business people who allow their customers to pay them when and if they feel like it. I know of such a tradesman who repeatedly gets bad debts like accolades. How is that? Just because he cannot bring himself to request the cash and people just overpower him.
If you let someone credit, only do it because they proved consistency to you by paying cash on delivery (COD) for a period. Furthermore, you should gauge whether they have the cash to pay you - if not then why do business with them. Don’t fool yourself into thinking “I need the work” or “I need the sales”. It’s pointless in doing the job or providing the goods for nothing if you aren’t paid.
If you are the sort of person who can’t ask for the fee even after the job has been finished, try these cheats:
Tell your customer that when the service is finished, you will need cash or cheque. They should probably have it on them at at the finish date and you do not need to ask for your fee.
When you send out the initial quote, be sure your payment terms are evident.
Complete an invoice that has your terms of payment evidently stated and hand the client the invoice when the task is finished. They should see the invoice and simply know they can pay for it now without you having to say anything. Invent a “cruel boss” who would burn you alive if you can’t go back with the money for the work.
Set up your banking institution to provide you with Merchant facilities so you can take credit cards such as Mastercard and Visa. The large majority of people utilize credit cards and it will solve the issue of the client not having a cheque account or not having the cash in their wallet.
Likewise, don’t be persuaded against to keep the goods til the payment is made. Remember, until the goods have been paid for, they remain yours.
If you decide to let someone credit, make sure you have the following information from them a week BEFORE you allow them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you know all this information, call the bank branch and make certain that they have an account at there. Then, telephone all of the trade reference and find out if they pay their bills correctly or if they have any issues 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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