Rule One of Business: Get Paid
To be paid, just as you would realise is essentially important in your business because if you aren’t being paid, what’s the point in business?
You may be shocked at the loads of business people who only get their clients to make payment when and if they remember it. I am acquainted with one business owner who always collects bad debts like accolades. How is that possible? Probably because he doesn’t bring himself to request the money and lets people overpower him.
If you permit a customer credit, do it only when they cleared themselves to you by paying cash on delivery (COD) for a time. Also, you must find whether they have the funds to pay you - if not don’t do business with them. Don’t trick yourself into thinking “I need the work” or “I need the sales”. It’s pointless to do the service or providing the goods for free if you aren’t paid.
If you are the type of person who can’t demand the fee even after the job has been completed, try these hints:
Tell your customer that when the job is done, you need cash or cheque. They should likely have it to hand over at at the finish date and you will not have to ask for your fee.
When giving out a quote, be sure your payment terms are simple.
Create an invoice that has your terms of payment simply printed and send the customer the invoice when the job is completed. They can take the invoice and reactively realise they have to pay you for it now without you having to say a word. Make up a “cruel boss” who might torture you alive if you do not bring back the payment for the work.
Arrange with your bank branch to set you up with Merchant facilities so you can use credit cards including Mastercard and Visa. The large majority of people utilize credit cards and it could solve the dilemma of the customer not operating a cheque account or not having the cash on hand.
Likewise, don’t be frightened to hand over any goods until you’ve been paid. Understand, until they’re paid for, they still remain yours.
If you choose to permit a customer credit, make sure you have taken the following details off them some time BEFORE you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you take all this information, ring the bank branch and make for sure that they have an account at there. Then, call each trade reference and request if they pay their debts 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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