Rule One of Business: Get Paid
Getting paid, just like you would figure is vitally crucial in your business because if you don’t get paid, what are you doing in business?
You may be laughing at the heaps of business people who only have their customer base to pay them when and if they get around to it. I am acquainted with such a trader who always collects bad debts like accolades. For what reason? Very possibly because he cannot bring himself to take the cash and people just overpower him.
If you give a client credit, do it only after they have proven their worth to you by paying cash on delivery (COD) for some period of time. Furthermore, you need to find whether they have the cash to pay you - otherwise you shouldn’t do business with them. Don’t trick yourself into the line of “I need the work” or “I need the sales”. It’s pointless doing the service or providing the goods for zero if you aren’t getting paid.
If you are the sort of person who can’t demand the fee when the service has been finished, try these cheats:
Tell your client that when the work is done, you need cash or cheque. They should more than likely have it on them at completion and you don’t have to request your money.
When you give out the quote, make sure your payment terms are simple.
Do up an invoice that has your terms of payment plainly listed and give the customer the invoice when the service is completed. They should review the invoice and reactively realise they have to pay it off now without you having to say a word. Create a “vicious boss” who may torture you alive if you can’t go back with the fee for the job.
Set up your banking institution to set you up with Merchant facilities so you can use credit cards like Mastercard and Visa. Most people own credit cards and it can stop the problem of the client not having a cheque account or not having the cash in their pocket.
Moreover, don’t be persuaded against to keep hold on your goods till payment is paid. Understand, until they’re paid for, they are still yours.
If you choose to let somebody credit, be sure you have the following contact information of them a week BEFORE you allow them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you take all this detail, call the branch and make sure that they do have an account there. Then, call each trade reference and find out if they pay their debts punctually 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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