Rule One of Business: Get Paid
Getting paid, just as you would figure is fundamentally the point to your business because if you are not getting paid, what’s the point in business?
You might be surprised at the loads of business people who let their customer base to make payment when and if they get on with it. I am acquainted with a businessman who habitually makes bad debts like charms. Why? Most likely because he won’t bring himself to request the money and lets people take advantage of him.
If you let a customer credit, do it only if they have proved their integrity to you by paying cash on delivery (COD) for some time. Moreover, you need to see whether they have the money to pay you – if not why do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s fruitless doing the job or providing the goods for free if you aren’t paid.
If you are the kind of person who can’t ask for the cash after the work has been done, try these ideas:
Tell your client that when the service is finished up, you require cash or cheque. They should be likely to have it on them at completion and you will not have to demand your money.
When you give out the quote, make sure your payment terms are visible.
Do up an invoice that has your terms of payment evidently listed and give the client the invoice when the service is done. They should see the invoice and reactively assume they can pay the money now without you going to say a word. Create a “cruel boss” who may flay you alive if you can not bring back the cash for the service.
Set up your banking institution to have you running with Merchant facilities so you can accept credit cards like Mastercard and Visa. Many people possess credit cards and it should solve the difficulty of the customer not having a cheque book or not having enough cash at the time.
Moreover, don’t be afraid to hold onto any goods til after you’ve been paid. Know, until the goods are paid for, the goods still are yours.
If you decide you’re going to let somebody credit, make sure you get the following details off them some time BEFORE you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you have all this information, telephone the branch and make for certain that they have an account with them. Then, contact each of the trade reference and ask if they pay their invoices punctually or if they have had 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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