Rule One of Business: Get Paid
To be paid, just as you would imagine is essentially the point to your business because if you are not getting paid, what are you doing in business?
You might be astounded at the amount of business people who only have their clients to pay up when and if they get around to it. I know such a trader who habitually collects bad debts like accolades. How is that possible? Most likely because he doesn’t bring himself to take the payment and people overpower him.
If you allow somebody credit, only do it because they have cleared consistency to you by paying cash on delivery (COD) for some period of time. Moreover, you can gauge whether they have the resources to pay you - if not then you should not do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s fruitless doing the work or providing the goods for zero if you aren’t paid.
If you are the sort of person who can’t ask for the payment even after the job has been finished, try these cheats:
Tell your customer that when the job is completed, you will require cash or cheque. They will likely have it to hand over at the point of sale and you don’t need to request your payment.
When you give out a quote, be sure your payment terms are clear.
Complete an invoice with the terms of payment evidently stated and give the customer the invoice when the task is finished up. They should take the invoice and immediately assume they need to pay you the fee now without you having to say a word. Create an “evil boss” who may skin you alive if you can not leave with the money for the service.
Ask your branch to provide you with Merchant facilities so you can use credit cards including Mastercard and Visa. The majority of people possess credit cards and it would solve the issue of the client not holding a cheque book or not having the right cash in their pocket.
Likewise, don’t be persuaded against to hand over your goods till payment has been made. Understand, until the goods have been paid for, they still are yours.
If you choose to let a customer credit, be sure you have taken the following details from them at a point 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
Once you possess all this detail, ring the bank branch and make sure that they do have an account with them. Then, call each trade reference and find out if they pay their bills consistently 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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