Rule One of Business: Get Paid
To get paid, like you would understand is fundamentally important at your business because if you aren’t paid, why are you in business?
You will be surprised at the loads of business people who permit their clients to pay them when and if they remember it. I know one business owner who habitually holds bad debts like weeds. Why is that? Very possibly because he can’t bring himself to request the payment and people just intimidate him.
If you let somebody credit, only do it after they proved their worth to you by paying cash on delivery (COD) for some period. Secondly, you must check whether they have the funds to pay you - if not then do not do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s damaging in doing the job or providing the goods for zero if you are not getting paid.
If you are the sort of person who can’t ask for the cash when the service has been finished, try these hints:
Tell your customer that when the work is finished, you will require cash or cheque. They will likely have it ready at the transacation and you will not need to request your fee.
When sending out an initial quote, be sure your payment terms are evident.
Complete an invoice with the terms of payment evidently printed and send the client the invoice when the work is finished. They can take the invoice and generally assume they will pay the fee now without you being required to say a thing. Make up a “vicious boss” who may torture you alive if you don’t return with the pay for the job.
Organise your branch to hook you up with Merchant facilities so you can accept credit cards such as Mastercard and Visa. Many people utilize credit cards and it will fix the difficulty of the client not owning a cheque account or not having the right cash at the time.
As another option, don’t be persuaded against to keep any goods until you have been paid. Know, until they have been paid for, they remain yours.
If you plan to let somebody credit, make sure you have taken the following contact details from them a week 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 have all this information, telephone the banking institution and make certain that they do operate an account there. Then, phone each trade reference and inquire if they pay their debts on time or if there are 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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