Rule One of Business: Get Paid
Being paid, like you would figure is essentially important at your business because if you are not being paid, what are you doing in business?
You would be laughing at the loads of business people who only get their customer base to simply pay when and if they remember it. I am acquainted with a businessman who repetitively makes bad debts like accolades. Why is that? Very possibly because he can’t bring himself to demand the cash and lets people intimidate him.
If you give somebody credit, do so only because they have proved themselves to you by paying cash on delivery (COD) for a period. Furthermore, you should find whether they have the means to pay you - if not then you shouldn’t do business with them. Don’t push yourself into thinking “I need the work” or “I need the sales”. It’s fruitless when you do the job or providing the goods for zero if you are not paid.
If you are the sort of person who can’t demand the money even after the service has been done, try these hints:
Tell your client that when the job is completed, you need cash or cheque. They will more than likely have it there at the point of sale and you will not have to request your payment.
When handing out your quote, make sure your payment terms are clear.
Create an invoice including the terms of payment simply listed and hand the client the invoice when the service is finished. They should look at the invoice and immediately assume they will pay you the money now without you needing to say a word. Fabricate a “cruel boss” who might skin you alive if you can not return with the pay for the job.
Ask your branch to have you running with Merchant facilities so you can accept credit cards including Mastercard and Visa. Many people own credit cards and it could prevent the difficulty of the customer not holding a cheque account or not having enough cash in their pocket.
Alternatively, don’t be afraid to hold the goods until payment is paid. Understand, until they’re paid for, they are still yours.
If you decide you’re going to permit someone credit, make sure you take the following information 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
When you take all this detail, ring the branch and make for sure that they operate an account then. Then, telephone every trade reference and ask if they pay their bills on time 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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