Rule One of Business: Get Paid
To be paid, just like you would understand is fundamentally crucial at your business because if you are not paid, what’s the point in business?
You would be shocked at the number of business people who allow their clients to simply pay when and if they get on with it. I am acquainted with a tradesman who habitually holds bad debts like awards. Why, do you think? Probably because he won’t bring himself to request the cash and people can just intimidate him.
If you give somebody credit, do it only after they proved consistency to you by paying cash on delivery (COD) for a while. Furthermore, you need to see whether they have the cash to pay you - otherwise you should not do business with them. Don’t push yourself into the line of “I need the work” or “I need the sales”. It’s ultimately when you do the work or providing the goods for nothing if you do not get paid.
If you are the type of person who can’t request the money when the work has been finished, try these tips:
Tell your customer that when all the work is completed, you require cash or cheque. They will probably have it on them at completion and you don’t have to ask for your fee.
When you hand out the initial quote, make sure your payment terms are understandable.
Form an invoice that has the terms of payment clearly stated and hand the client the invoice when the work is finished up. They can see the invoice and simply realise they need to pay you the fee now without you having to say a word. Manufacture a “vicious boss” who might torture you alive if you don’t leave with the payment for the service.
Arrange with your branch to set you up with Merchant facilities so you can accept credit cards like Mastercard and Visa. The large part of people use credit cards and it can solve the issue of the client not owning a cheque account or not having the right amount of cash in their wallet.
Moreover, don’t be afraid to hand over your goods till payment is paid. Understand, until they have been paid for, they still remain yours.
If you decide you’re going to permit somebody credit, make sure you have got the following information off them at a time PREVIOUSLY you give them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
When you possess all this information, ring the bank and make certain that they do operate an account there. Then, telephone each of the trade reference and request if they pay their bills on time 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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