Rule One of Business: Get Paid
Being paid, you would figure is fundamentally crucial in your business because if you aren’t getting paid, what are you doing in business?
You will be surprised at the heaps of business people who let their customers to make payment when and if they remember it. I am acquainted with one business owner who always gets bad debts like charms. How? Most likely because he doesn’t bring himself to demand the cash and people can just intimidate him.
If you permit a customer credit, only do so because they cleared themselves to you by paying cash on delivery (COD) for some period. Secondly, you must find whether they have the funds to pay you - if not then don’t do business with them. Don’t push yourself into saying “I need the work” or “I need the sales”. It’s fruitless in doing the service or providing the goods for zero if you don’t get paid.
If you are the sort of person who can’t ask for the fee even after the work has been finished, try these tips:
Tell your client that when the work is finished up, you will need cash or cheque. They should more than likely have it on them at the transacation and you don’t need to request your money.
When giving out an initial quote, make sure your payment terms are simple.
Do up an invoice including your terms of payment evidently stated and send the client the invoice when the work is done. They will see the invoice and immediately realise they can pay you for it now without you needing to say anything. Fabricate a “cruel boss” who would burn you alive if you can not leave with the money for the service.
Organise your bank to provide you with Merchant facilities so you can accept credit cards for example Mastercard and Visa. The large part of people utilize credit cards and it could stop the problem of the client not owning a cheque book or not having the right amount of cash on hand.
As another option, don’t be persuaded against to keep the promised goods till the payment is made. Don’t forget, until the goods have been paid for, they are still yours.
If you decide to permit somebody credit, make sure you have taken the following information off 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
When you have all this information, ring the bank branch and make certain that they do use an account with them. Then, phone all of the trade reference and ask if they pay their invoices on time or if there have been 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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