Getting paid, just like you would realise is vitally important in your business because if you are not paid, what are you doing in business?
You would be surprised at the heaps of business people who only have their clients to pay up when and if they feel like it. I know such a business owner who persistently collects bad debts like awards. How is that possible? Probably because he won’t bring himself to take the payment and people can just take advantage of him.
If you allow a customer credit, do so only after they cleared their integrity to you by paying cash on delivery (COD) for some period. Secondly, you need to see whether they have the cash to pay you – if not then you should not do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s pointless to do the job or providing the goods for zip if you aren’t getting paid.
If you are the kind of person who can’t request the cash even after the service has been completed, try these tips:
Tell your customer that when the job is finished, you require cash or cheque. They will more than likely have it ready at the transacation and you do not need to request your money.
When you give out the initial quote, make sure your payment terms are evident.
Do up an invoice that has the terms of payment clearly printed and hand the client the invoice when the job is finished up. They will see the invoice and immediately assume they will pay the fee now without you needing to say a thing. Create a “nasty boss” who might torture you alive if you can’t go back with the pay for the service.
Organise your branch to set you up with Merchant facilities so you can accept credit cards for example Mastercard and Visa. Many people utilize credit cards and it should cease the problem of the customer not holding a cheque book or not having enough cash on hand.
Otherwise, don’t be frightened to hold your goods until you’ve been paid. Don’t forget, until they have been paid for, they are still yours.
If you plan to let somebody credit, be sure you have got the following contact information from them a week BEFORE you allow them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
When you take all this detail, call the bank and make for sure that they do have an account then. Then, telephone each trade reference and ask if they pay their debts punctually 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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