Rule One of Business: Get Paid
Getting paid, just like you would imagine is vitally crucial at your business because if you are not being paid, what’s the point in business?
You would be shocked at the number of business people who allow their clients to make payment when and if they get around to it. I am acquainted with a business owner who continuously collects bad debts like accolades. For what reason? Probably because he cannot bring himself to take the cash and people can just overpower him.
If you permit a client credit, only do so if they proved themselves to you by paying cash on delivery (COD) for a while. Furthermore, you can check whether they have the resources to pay you - if not then don’t do business with them. Don’t kid yourself into thinking “I need the work” or “I need the sales”. It’s ultimately when you do the service or providing the goods for free if you aren’t getting paid.
If you are the type of person who can’t request the fee after the service has been completed, try these ideas:
Tell your customer that when the service is completed, you will need cash or cheque. They will more than likely have it to hand over at the point of sale and you don’t need to ask for your money.
When you send a quote, be sure your payment terms are simple.
Form an invoice including the terms of payment simply listed and send the customer the invoice when the work is done. They should take the invoice and simply know they can pay for it now without you being required to say a thing. Manufacture an “evil boss” who will burn you alive if you don’t bring back the fee for the job.
Arrange with your banking institution to provide you with Merchant facilities so you can use credit cards like Mastercard and Visa. The large majority of people own credit cards and it can cease the dilemma 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 hold on any goods till after the payment has been made. Know, until the goods have been paid for, the goods are still yours.
If you decide to permit someone credit, be sure you take the following details from 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
After you possess all this detail, ring the banking institution and make certain that they do operate an account then. Then, phone each of the trade reference and find out if they pay their debts consistently 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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