Rule One of Business: Get Paid
To be paid, as you would understand is essentially fundamental in your business because if you aren’t being paid, why are you in business?
You may be astounded at the loads of business people who let their clientele to pay up when and if they remember it. I am acquainted with a trader who habitually collects bad debts like charms. Why is that? Just because he doesn’t bring himself to take the payment and lets people take advantage of him.
If you permit somebody credit, do so only when they have proven consistency to you by paying cash on delivery (COD) for some time. Secondly, you can check whether they have the means to pay you - otherwise don’t do business with them. Don’t trick yourself into the line of “I need the work” or “I need the sales”. It’s damaging to do the work or providing the goods for nothing if you don’t get paid.
If you are the sort of person who can’t demand the cash even after the work has been completed, try these hints:
Tell your customer that when the job is done, you require cash or cheque. They will likely have it ready at the point of sale and you do not need to ask for your pay.
When you send a quote, be sure your payment terms are visible.
Do up an invoice with the terms of payment simply stated and give the client the invoice when the task is finished up. They can look at the invoice and reactively understand they can pay it off now without you having to say a thing. Create an “evil boss” who will torture you alive if you can not go back with the pay for the work.
Set up your bank branch to set you up with Merchant facilities so you can take credit cards such as Mastercard and Visa. The large majority of people utilize credit cards and it will solve the dilemma of the client not owning a cheque book or not having the right amount of cash in their wallet.
As another option, don’t be asked not to keep any goods til they have been paid for. Don’t forget, until the goods have been paid for, they still are yours.
If you decide you’re going to let a client credit, make sure you have taken the following details about them a week BEFORE you give them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you possess all this information, contact the banking institution and make for sure that they have an account at there. Then, ring every trade reference and inquire if they pay their fees consistently or if they have had 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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