Rule One of Business: Get Paid
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To get paid, you would figure is vitally important in your business because if you don’t get paid, why are you in business?
You would be laughing at the amount of business people who only have their customers to pay up when and if they feel like it. I know of one trader who repeatedly holds bad debts like weeds. Why is that? Most likely because he won’t bring himself to take the payment and people intimidate him.
If you give a client credit, only do it if they have proved themselves to you by paying cash on delivery (COD) for a while. Furthermore, you must see whether they have the means to pay you - if not then don’t do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless doing the job or providing the goods for nothing if you are not paid.
If you are the kind of person who can’t request the money after the work has been completed, try these tips:
Tell your client that when the job is done with, you require cash or cheque. They should probably have it there at at the finish date and you won’t have to ask for your fee.
When you hand out the initial quote, be sure your payment terms are simple.
Do up an invoice that has the terms of payment evidently stated and give the customer the invoice when the job is completed. They should review the invoice and immediately understand they should pay it off now without you having to say a thing. Fabricate a “cruel boss” who would burn you alive if you can’t return with the payment for the work.
Organise your banking institution to set you up with Merchant facilities so you can accept credit cards including Mastercard and Visa. Many people have credit cards and it would cease the difficulty of the client not holding a cheque book or not having the right amount of cash in their wallet.
Likewise, don’t be afraid to hold onto the promised goods till after you’ve been paid. Understand, until they have been paid for, they remain yours.
If you decide you’re going to give somebody credit, be sure you have got the following contact information of them some time 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 know all this information, contact the banking institution and make for sure that they do use an account with them. Then, call all of the trade reference and request if they pay their invoices punctually or if they have had any dilemmas 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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