Rule One of Business: Get Paid
To get paid, like you would imagine is essentially the point in your business because if you aren’t paid, what are you doing in business?
You might be laughing at the heaps of business people who have their customers to pay them when and if they get around to it. I know of a tradesman who repetitively collects bad debts like accolades. Why, do you think? Just because he can’t bring himself to demand the payment and people overpower him.
If you give a client credit, do so only after they have cleared themselves to you by paying cash on delivery (COD) for a period. Also, you must gauge whether they have the funds to pay you - if not then why do business with them. Don’t kid yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless when you do the work or providing the goods for free if you aren’t getting paid.
If you are the sort of person who can’t request the fee even when the job has been done, try these hints:
Tell your client that when the work is finished up, you will require cash or cheque. They will likely have it ready at the transacation and you do not have to demand your fee.
When sending out the quote, make sure your payment terms are visible.
Form an invoice with the terms of payment clearly printed and give the customer the invoice when the job is finished up. They can look at the invoice and simply assume they can pay you for it now without you going to say a thing. Create a “cruel boss” who will torture you alive if you can not bring back the payment for the work.
Set up your bank branch to have you running with Merchant facilities so you can take credit cards including Mastercard and Visa. Many people own credit cards and it should cease the issue of the client not operating a cheque account or not having the right amount of cash in their pocket.
As another option, don’t be frightened to keep your goods till the payment has been made. Know, until the goods are paid for, the goods remain yours.
If you plan to allow a client credit, be sure you have taken the following contact information of them some time PREVIOUSLY 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 record all this detail, ring the branch and make sure that they do operate an account there. Then, phone every trade reference and find out if they pay their fees on time or if they have had any difficulties 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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