Rule One of Business: Get Paid
To get paid, you would imagine is fundamentally important to 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 only get their clientele to pay them when and if they get on with it. I know of one businessman who repetitively holds bad debts like accolades. Why, do you think? Most likely because he can’t bring himself to take the money and lets people take advantage of him.
If you permit somebody credit, do it only because they have proved their worth to you by paying cash on delivery (COD) for a time. Secondly, you need to check whether they have the means to pay you - if not then you should not do business with them. Don’t push yourself into the pattern of “I need the work” or “I need the sales”. It’s damaging to do the service or providing the goods for nothing if you do not get paid.
If you are the type of person who can’t ask for the money when the job has been finished, try these hints:
Tell your client that when the job is finished up, you require cash or cheque. They should more than likely have it on them at at the finish date and you do not need to request your money.
When you hand out your quote, make sure your payment terms are understandable.
Create an invoice including the terms of payment clearly listed and hand the client the invoice when the task is completed. They should take the invoice and reactively know they can pay you for it now without you being required to say a word. Manufacture a “vicious boss” who might burn you alive if you can not bring back the money for the job.
Set up your bank branch to provide you with Merchant facilities so you can take credit cards such as Mastercard and Visa. The large majority of people have credit cards and it would cease the difficulty of the client not holding a cheque account or not having the right cash on hand.
Moreover, don’t be afraid to hold onto the goods till after they have been paid for. Understand, until they have been paid for, the goods still are yours.
If you choose to give someone credit, make sure you have got the following information off them some time PREVIOUSLY 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 record all this information, telephone the banking institution and make for sure that they use an account there. Then, telephone all of the trade reference and find out if they pay their bills on time or if there have been 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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