Rule One of Business: Get Paid
Tuesday, May 25th, 2010Being paid, you would figure is fundamentally the point to your business because if you do not get paid, why are you in business?
You will be shocked at the number of business people who let their customer base to make payment when and if they feel like it. I am acquainted with one tradesman who persistently collects bad debts like accolades. Why, do you think? Very possibly because he can’t bring himself to demand the money and people just overpower him.
If you permit someone credit, only do it because they have cleared themselves to you by paying cash on delivery (COD) for a period. Also, you should find whether they have the cash to pay you - if not you should not do business with them. Don’t kid yourself into the line of “I need the work” or “I need the sales”. It’s pointless when you do the service or providing the goods for nothing if you are not paid.
If you are the sort of person who can’t demand the fee even when the service has been done, try these hints:
Tell your client that when the service is done with, you will need cash or cheque. They will more than likely have it there at the transacation and you will not need to request your money.
When giving out a quote, be sure your payment terms are visible.
Complete an invoice including the terms of payment simply printed and hand the customer the invoice when the task is done. They will take the invoice and immediately know they will pay the money now without you being required to say a word. Manufacture a “cruel boss” who will skin you alive if you can’t leave with the pay for the job.
Ask your bank branch to provide you with Merchant facilities so you can take credit cards for example Mastercard and Visa. Most people own credit cards and it could stop the difficulty of the client not holding a cheque book or not having enough cash in their wallet.
Otherwise, don’t be afraid to keep your goods until you have been paid. Understand, until they’re paid for, the goods are still yours.
If you choose to give someone credit, be sure you have taken the following details about them some time PREVIOUSLY you let 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 branch and make certain that they operate an account at there. Then, telephone all of the trade reference and inquire if they pay their debts on time 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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