Rule One of Business: Get Paid
Being paid, you would imagine is vitally crucial in your business because if you do not get paid, what’s the point in business?
You might be astounded at the amount of business people who permit their customers to pay up when and if they feel like it. I am acquainted with a trader who persistently makes bad debts like accolades. How is that possible? Most likely because he won’t bring himself to ask for the payment and people overpower him.
If you allow someone credit, do it only after they have cleared their worth to you by paying cash on delivery (COD) for some period. Moreover, you need to check whether they have the means to pay you - if they don’t then you should not do business with them. Don’t trick yourself into thinking “I need the work” or “I need the sales”. It’s pointless in doing the job or providing the goods for nada if you do not get paid.
If you are the sort of person who can’t demand the payment when the service has been completed, try these hints:
Tell your client that when all the work is completed, you will need cash or cheque. They will likely have it on them at completion and you do not have to demand your fee.
When you send out the quote, make sure your payment terms are simple.
Do up an invoice that has your terms of payment evidently stated and send the customer the invoice when the task is completed. They should look at the invoice and immediately understand they should pay you now without you having to say a thing. Fabricate a “cruel boss” who will torture you alive if you don’t return with the cash for the work.
Organise your banking institution to hook you up with Merchant facilities so you can accept credit cards including Mastercard and Visa. Many people have credit cards and it could solve the difficulty of the client not having a cheque account or not having the cash in their wallet.
As another option, don’t be asked not to hand over the goods till after you have been paid. Remember, until they have been paid for, they still are yours.
If you plan to permit a client credit, make sure you have taken the following contact details of them a week BEFORE 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 know all this information, ring the branch and make certain that they use an account with them. Then, phone each trade reference and ask if they pay their bills consistently or if there are 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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