Rule One of Business: Get Paid
Getting paid, you would understand is essentially crucial at your business because if you aren’t being paid, what are you doing in business?
You will be surprised at the number of business people who permit their clientele to pay them when and if they feel like it. I am acquainted with one trader who persistently makes bad debts like charms. How? Just because he doesn’t bring himself to ask for the payment and people just take advantage of him.
If you give someone credit, only do it after they have proven their integrity to you by paying cash on delivery (COD) for a period. Also, you must check whether they have the funds to pay you - if not then do not do business with them. Don’t kid yourself into the pattern of “I need the work” or “I need the sales”. It’s ultimately in doing the job or providing the goods for zip if you don’t get paid.
If you are the type of person who can’t demand the money even after the service has been completed, try these hints:
Tell your client that when the service is done, you require cash or cheque. They will more than likely have it there at at the finish date and you will not have to demand your money.
When you hand out the initial quote, make sure your payment terms are simple.
Complete an invoice including the terms of payment simply listed and give the client the invoice when the job is finished up. They will review the invoice and reactively understand they need to pay for it now without you being required to say a thing. Create an “evil boss” who will torture you alive if you can not leave with the pay for the job.
Organise your banking to set you up with Merchant facilities so you can accept credit cards including Mastercard and Visa. The large part of people possess credit cards and it would solve the problem of the customer not having a cheque account or not having the right amount of cash in their wallet.
Moreover, don’t be afraid to hand over your goods til after you’ve been paid. Don’t forget, until the goods are paid for, the goods still are yours.
If you choose to permit a customer credit, be sure you have the following details of 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
After you have all this information, contact the bank and make certain that they use an account then. Then, ring each trade reference and inquire if they pay their fees correctly or if they have any dilemmas 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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