Rule One of Business: Get Paid
Getting paid, you would imagine is fundamentally fundamental to your business because if you don’t get paid, what are you doing in business?
You might be astounded at the loads of business people who only get their customer base to make payment when and if they get on with it. I know of a trader who continuously gets bad debts like accolades. Why? Very possibly because he can’t bring himself to take the cash and people overpower him.
If you permit somebody credit, do it only because they have proved themselves to you by paying cash on delivery (COD) for a period. Furthermore, you should gauge whether they have the resources to pay you - otherwise why do business with them. Don’t push yourself into thinking “I need the work” or “I need the sales”. It’s damaging in doing the job or providing the goods for zip if you aren’t getting paid.
If you are the sort of person who can’t ask for the cash even after the job has been finished, try these cheats:
Tell your client that when the service is finished, you will require cash or cheque. They should likely have it ready at completion and you will not have to demand your money.
When you give out a quote, make sure your payment terms are clear.
Complete an invoice including your terms of payment plainly stated and hand the client the invoice when the service is finished. They can take the invoice and generally realise they should pay the fee now without you having to say anything. Fabricate a “cruel boss” who might burn you alive if you don’t bring back the fee for the service.
Ask your banking institution to set you up with Merchant facilities so you can use credit cards such as Mastercard and Visa. The majority of people have credit cards and it should stop the issue of the customer not operating a cheque book or not having the cash at the time.
Likewise, don’t be persuaded against to hold the promised goods until after payment is paid. Remember, until they have been paid for, the goods still are yours.
If you decide you’re going to allow a customer credit, be sure you take the following information of 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
After you have all this information, contact the bank branch and make certain that they operate an account then. Then, phone every trade reference and find out if they pay their bills consistently or if there are 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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