Rule One of Business: Get Paid
Being paid, as you would understand is fundamentally fundamental to your business because if you do not get paid, why are you in business?
You might be shocked at the loads of business people who allow their clientele to pay them when and if they remember it. I know of a business owner who repetitively holds bad debts like trophies. Why, do you think? Just because he can’t bring himself to demand the cash and people just overpower him.
If you allow somebody credit, only do so after they proved their worth to you by paying cash on delivery (COD) for some time. Moreover, you should find whether they have the funds to pay you – if not then you shouldn’t do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless doing the job or providing the goods for nada if you aren’t getting paid.
If you are the kind of person who can’t request the payment after the work has been done, try these cheats:
Tell your customer that when the work is done, you need cash or cheque. They will more than likely have it to hand over at completion and you do not need to demand your payment.
When you send the quote, make sure your payment terms are understandable.
Do up an invoice that has the terms of payment evidently listed and hand the client the invoice when the service is finished up. They should take the invoice and immediately realise they will pay you now without you being required to say a word. Create a “cruel boss” who might flay you alive if you do not go back with the pay for the service.
Set up your bank branch to hook you up with Merchant facilities so you can have credit cards for example Mastercard and Visa. Many people have credit cards and it will cease the problem of the customer not having a cheque book or not having enough cash at the time.
As another option, don’t be persuaded against to hold your goods till after you’ve been paid. Understand, until they’re paid for, the goods remain yours.
If you choose to permit a customer credit, be sure you take the following details off them a week 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
Once you record all this information, telephone the banking institution and make certain that they do use an account then. Then, ring each of the trade reference and inquire if they pay their invoices on time or if they have any dilemmas 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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