Rule One of Business: Get Paid
To get paid, like you would realise is fundamentally important to your business because if you are not being paid, what are you doing in business?
You would be surprised at the number of business people who allow their clients to pay them when and if they get on with it. I am acquainted with such a businessman who habitually makes bad debts like accolades. Why? Simply because he won’t bring himself to take the payment and allows people to intimidate him.
If you let a customer credit, do so only after they proved themselves to you by paying cash on delivery (COD) for some period. Secondly, you can check whether they have the means to pay you – otherwise don’t do business with them. Don’t push yourself into saying “I need the work” or “I need the sales”. It’s fruitless doing the work or providing the goods for nada if you aren’t getting paid.
If you are the sort of person who can’t ask for the fee even after the job has been done, try these ideas:
Tell your client that when the service is finished, you will require cash or cheque. They will likely have it ready at the point of sale and you won’t have to request your pay.
When handing out your quote, be sure your payment terms are simple.
Complete an invoice including your terms of payment clearly listed and give the customer the invoice when the work is done. They will see the invoice and generally realise they have to pay you the fee now without you going to say a word. Make up an “evil boss” who may burn you alive if you don’t go back with the cash for the work.
Arrange with your bank branch to set you up with Merchant facilities so you can have credit cards including Mastercard and Visa. The large part of people have credit cards and it will cease the problem of the customer not having a cheque account or not having the right amount of cash in their wallet.
Otherwise, don’t be asked not to keep the promised goods til after they have been paid for. Understand, until the goods have been paid for, they are still yours.
If you decide you’re going to give somebody credit, be sure you take the following details from them some time 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
After you have all this information, ring the bank branch and make for certain that they have an account there. Then, contact every trade reference and request if they pay their fees punctually or if they have had 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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