Rule One of Business: Get Paid
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To be paid, as you would imagine is essentially fundamental at your business because if you are not getting paid, what’s the point in business?
You will be astounded at the amount of business people who permit their clientele to simply pay when and if they remember it. I am acquainted with a trader who persistently holds bad debts like awards. Why? Just because he cannot bring himself to ask for the cash and people can just intimidate him.
If you give a customer credit, only do so if they have proved themselves to you by paying cash on delivery (COD) for a time. Furthermore, you need to find whether they have the cash to pay you - otherwise do not do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s fruitless in doing the job or providing the goods for nada if you are not paid.
If you are the kind of person who can’t ask for the payment when the job has been completed, try these cheats:
Tell your client that when all the work is finished, you will require cash or cheque. They will probably have it to hand over at the point of sale and you will not have to request your money.
When you send your quote, be sure your payment terms are simple.
Form an invoice with the terms of payment plainly stated and hand the client the invoice when the work is completed. They should review the invoice and immediately know they have to pay the money now without you needing to say a word. Fabricate a “cruel boss” who will flay you alive if you do not bring back the pay for the work.
Arrange with your bank branch to have you running with Merchant facilities so you can take credit cards for example Mastercard and Visa. Most people use credit cards and it should solve the problem of the customer not operating a cheque account or not having the right amount of cash at the time.
Otherwise, don’t be asked not to hand over the promised goods til after payment is paid. Remember, until they’re paid for, the goods remain to be yours.
If you decide to permit someone credit, make sure you have got the following information from them a week PREVIOUSLY you permit them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
When you record all this detail, call the bank and make sure that they operate an account then. Then, ring every trade reference and inquire if they pay their fees consistently or if they have 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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