Rule One of Business: Get Paid
To get paid, as you would understand is fundamentally the point to your business because if you aren’t getting paid, what are you doing in business?
You might be surprised at the loads of business people who let their clientele to pay them when and if they get on with it. I know one business owner who continuously makes bad debts like charms. For what reason? Just because he cannot bring himself to demand the cash and people overpower him.
If you permit someone credit, only do so because they have proven themselves to you by paying cash on delivery (COD) for a period. Furthermore, you can check whether they have the cash to pay you - if they don’t then why do business with them. Don’t fool yourself into thinking “I need the work” or “I need the sales”. It’s fruitless in doing the work or providing the goods for zip if you do not get paid.
If you are the kind of person who can’t request the money even when the work has been done, try these hints:
Tell your customer that when all the work is finished up, you will require cash or cheque. They should likely have it on them at at the finish date and you will not need to demand your fee.
When handing out the quote, be sure your payment terms are plain.
Form an invoice that has the terms of payment plainly stated and give the customer the invoice when the service is finished up. They will see the invoice and simply know they have to pay you the fee now without you having to say anything. Invent a “vicious boss” who may burn you alive if you do not go back with the cash for the job.
Arrange with your banking to set you up with Merchant facilities so you can accept credit cards such as Mastercard and Visa. The large majority of people utilize credit cards and it should fix the problem of the customer not owning a cheque book or not having the right amount of cash in their pocket.
As another option, don’t be afraid to keep the promised goods till the payment has been made. Understand, until the goods are paid for, the goods still remain yours.
If you choose to allow a customer credit, make sure you have the following contact details from them a week BEFORE you permit 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 detail, ring the bank branch and make for certain that they use an account there. Then, phone every trade reference and find out if they pay their fees correctly or if they have 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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