Rule One of Business: Get Paid
Tuesday, May 25th, 2010Getting paid, just as you would understand is fundamentally important in your business because if you aren’t paid, what’s the point in business?
You may be surprised at the number of business people who let their clientele to pay up when and if they remember it. I know such a businessman who habitually makes bad debts like accolades. How? Simply because he won’t bring himself to ask for the payment and allows people to take advantage of him.
If you permit somebody credit, do so only after they have cleared themselves to you by paying cash on delivery (COD) for a while. Also, you can find whether they have the funds to pay you - if they don’t then you shouldn’t do business with them. Don’t kid yourself into the line of “I need the work” or “I need the sales”. It’s ultimately doing the work or providing the goods for zero if you do not get paid.
If you are the sort of person who can’t request the payment when the job has been done, try these hints:
Tell your client that when the work is completed, you need cash or cheque. They will probably have it on them at at the finish date and you do not have to demand your payment.
When you give out your quote, make sure your payment terms are evident.
Do up an invoice including your terms of payment simply stated and hand the client the invoice when the task is done. They will take the invoice and reactively realise they need to pay for it now without you needing to say a word. Make up an “evil boss” who may burn you alive if you can’t go back with the pay for the service.
Ask your branch to provide you with Merchant facilities so you can accept credit cards for example Mastercard and Visa. The majority of people utilize credit cards and it can prevent the dilemma of the customer not holding a cheque account or not having the right cash in their pocket.
Moreover, don’t be asked not to keep any goods until they have been paid for. Don’t forget, until they have been paid for, the goods still are yours.
If you choose to allow somebody credit, make sure you get the following information of them at a 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 take all this detail, telephone the banking institution and make for sure that they do use an account at there. Then, telephone each of the trade reference and find out if they pay their fees 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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