Rule One of Business: Get Paid
Being paid, just like you would realise is fundamentally crucial in your business because if you are not getting paid, what are you doing in business?
You will be surprised at the heaps of business people who only get their customers to simply pay when and if they get on with it. I know of a tradesman who continuously collects bad debts like accolades. Why? Probably because he won’t bring himself to request the payment and people can just intimidate him.
If you allow a client credit, only do it because they cleared consistency to you by paying cash on delivery (COD) for a while. Moreover, you can gauge whether they have the funds to pay you - otherwise you should not do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s damaging in doing the job or providing the goods for zip if you aren’t paid.
If you are the type of person who can’t demand the cash when the work has been finished, try these cheats:
Tell your customer that when the service is finished up, you will require cash or cheque. They should be likely to have it on them at the point of sale and you don’t need to ask for your fee.
When you give out an initial quote, be sure your payment terms are visible.
Create an invoice with the terms of payment evidently printed and send the customer the invoice when the task is finished. They can review the invoice and generally know they should pay you the money now without you going to say anything. Fabricate an “evil boss” who may flay you alive if you don’t leave with the fee for the work.
Arrange with your bank to set you up with Merchant facilities so you can have credit cards including Mastercard and Visa. Many people possess credit cards and it will solve the issue of the client not having a cheque account or not having enough cash on hand.
Otherwise, don’t be persuaded against to hold any goods till after they have been paid for. Remember, until they have been paid for, the goods still are yours.
If you decide to permit a client credit, be sure you have taken the following details of them at a point BEFORE you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you take all this information, call the branch and make for sure that they have an account with them. Then, call each trade reference and ask if they pay their debts consistently or if there have been 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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