Rule One of Business: Get Paid
To get paid, just like you would imagine is fundamentally important in your business because if you aren’t paid, what’s the point in business?
You may be surprised at the number of business people who allow their customers to pay them when and if they remember it. I know of such a trader who persistently makes bad debts like charms. How is that? Most likely because he won’t bring himself to take the cash and people can just take advantage of him.
If you give someone credit, do so only when they cleared their integrity to you by paying cash on delivery (COD) for a time. Moreover, you need to check whether they have the resources to pay you - if not you shouldn’t do business with them. Don’t trick yourself into the pattern of “I need the work” or “I need the sales”. It’s ultimately to do the service or providing the goods for nothing if you aren’t paid.
If you are the kind of person who can’t demand the fee after the work has been finished, try these hints:
Tell your client that when the job is done, you require cash or cheque. They should probably have it ready at the point of sale and you do not have to ask for your money.
When you hand out your quote, be sure your payment terms are clear.
Form an invoice with the terms of payment clearly listed and send the customer the invoice when the service is finished. They can look at the invoice and simply assume they have to pay you for it now without you going to say a word. Create a “nasty boss” who will flay you alive if you don’t bring back the cash for the job.
Organise your bank to provide you with Merchant facilities so you can have credit cards such as Mastercard and Visa. Many people own credit cards and it should fix the difficulty of the customer not owning a cheque book or not having the right amount of cash in their wallet.
Moreover, don’t be asked not to keep hold on the goods until after payment is paid. Know, until the goods have been paid for, they are still yours.
If you decide you’re going to allow somebody credit, be sure you have got the following contact information about them at a point 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, call the branch and make for certain that they use an account there. Then, contact each trade reference and inquire if they pay their invoices consistently 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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