Rule One of Business: Get Paid
Being paid, just as you would imagine is vitally fundamental to your business because if you do not get paid, what are you doing in business?
You might be surprised at the heaps of business people who only get their customer base to pay up when and if they remember it. I know of one tradesman who repetitively makes bad debts like awards. How is that possible? Simply because he cannot bring himself to ask for the money and lets people overpower him.
If you allow a client credit, do it only after they have cleared consistency to you by paying cash on delivery (COD) for some period of time. Moreover, you need to check whether they have the funds to pay you - otherwise you shouldn’t do business with them. Don’t fool yourself into saying “I need the work” or “I need the sales”. It’s damaging doing the service or providing the goods for free if you don’t get paid.
If you are the sort of person who can’t ask for the fee even after the job has been completed, try these ideas:
Tell your customer that when the job is done with, you require cash or cheque. They should be likely to have it on them at the point of sale and you don’t need to request your money.
When sending out the initial quote, make sure your payment terms are evident.
Complete an invoice that has the terms of payment clearly listed and give the customer the invoice when the work is finished up. They should look at the invoice and reactively assume they should pay you for it now without you having to say anything. Make up an “evil boss” who might flay you alive if you don’t return with the money for the work.
Organise your banking institution to set you up with Merchant facilities so you can accept credit cards including Mastercard and Visa. The large majority of people have credit cards and it would fix the issue of the customer not having a cheque book or not having enough cash in their wallet.
Alternatively, don’t be persuaded against to keep any goods until payment is paid. Don’t forget, until they’re paid for, the goods are still yours.
If you decide you’re going to allow somebody credit, be sure you have got the following details from them at a 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
When you know all this information, call the branch and make certain that they do operate an account there. Then, call each of the trade reference and find out if they pay their debts correctly or if they have 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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