Rule One of Business: Get Paid
Being paid, just like you would realise is essentially important at your business because if you are not being paid, what are you doing in business?
You will be surprised at the amount of business people who permit their customers to pay them when and if they remember it. I know of a trader who repeatedly makes bad debts like charms. How? Most likely because he doesn’t bring himself to demand the payment and people just take advantage of him.
If you allow a client credit, do it only because they cleared their integrity to you by paying cash on delivery (COD) for a period. Also, you should check whether they have the cash to pay you - otherwise why do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s fruitless to do the job or providing the goods for zip if you don’t get paid.
If you are the sort of person who can’t ask for the cash even when the job has been finished, try these cheats:
Tell your client that when the job is done with, you will require cash or cheque. They should be likely to have it ready at completion and you will not need to ask for your fee.
When handing out the initial quote, be sure your payment terms are simple.
Create an invoice including your terms of payment evidently stated and give the client the invoice when the service is completed. They can look at the invoice and reactively realise they have to pay it off now without you going to say a thing. Manufacture a “cruel boss” who will torture you alive if you don’t return with the pay for the service.
Organise your banking to provide you with Merchant facilities so you can take credit cards such as Mastercard and Visa. The majority of people use credit cards and it can cease the dilemma of the client not holding a cheque book or not having enough cash on hand.
Moreover, don’t be persuaded against to hold your goods till the payment is made. Know, until they have been paid for, the goods remain to be yours.
If you decide you’re going to permit someone credit, make sure you get the following details about them at a point 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 detail, telephone the bank and make for sure that they operate an account then. Then, call each of the trade reference and ask if they pay their fees on time or if there are any issues 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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