Rule One of Business: Get Paid
To get paid, just like you would figure is vitally fundamental in your business because if you are not being paid, why are you in business?
You would be shocked at the amount of business people who permit their clients to simply pay when and if they remember it. I know of such a trader who persistently collects bad debts like trophies. How is that? Probably because he doesn’t bring himself to request the money and lets people use him.
If you allow a client credit, do it only when they have proven themselves to you by paying cash on delivery (COD) for a period. Also, you must find whether they have the money to pay you - if not don’t do business with them. Don’t trick yourself into saying “I need the work” or “I need the sales”. It’s damaging in doing the service or providing the goods for free if you are not getting paid.
If you are the kind of person who can’t demand the cash when the job has been finished, try these cheats:
Tell your client that when the job is done, you require cash or cheque. They should be likely to have it to hand over at the transacation and you do not have to request your fee.
When handing out a quote, be sure your payment terms are visible.
Create an invoice that has the terms of payment simply printed and send the client the invoice when the task is finished. They can look at the invoice and immediately understand they can pay you the fee now without you having to say anything. Invent a “nasty boss” who may burn you alive if you do not bring back the money for the work.
Set up your banking institution to provide you with Merchant facilities so you can accept credit cards like Mastercard and Visa. The large majority of people use credit cards and it would stop the difficulty of the client not operating a cheque book or not having the right amount of cash in their wallet.
Moreover, don’t be frightened to hold onto your goods til they have been paid for. Know, until the goods are paid for, the goods remain yours.
If you decide to give a client credit, be sure you have the following information of them at a time BEFORE you give them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you take all this information, contact the bank branch and make sure that they do have an account with them. Then, contact all of the trade reference and request if they pay their debts punctually or if there have been any difficulties 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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