Rule One of Business: Get Paid
Tuesday, May 25th, 2010To get paid, you would imagine is vitally crucial to your business because if you are not being paid, what’s the point in business?
You might be laughing at the loads of business people who only have their customer base to simply pay when and if they get on with it. I know a businessman who repetitively gets bad debts like accolades. How is that possible? Probably because he cannot bring himself to request the cash and lets people use him.
If you let a client credit, only do so after they have proved consistency to you by paying cash on delivery (COD) for a period. Furthermore, you can see whether they have the funds to pay you - if not do not do business with them. Don’t trick yourself into thinking “I need the work” or “I need the sales”. It’s pointless doing the service or providing the goods for zero if you aren’t paid.
If you are the kind of person who can’t demand the money even when the work has been finished, try these cheats:
Tell your customer that when the service is finished, you will need cash or cheque. They will more than likely have it on them at completion and you don’t need to ask for your fee.
When you give out the quote, make sure your payment terms are simple.
Do up an invoice with the terms of payment clearly printed and hand the customer the invoice when the service is completed. They can look at the invoice and immediately realise they should pay the fee now without you going to say a thing. Make up a “vicious boss” who might flay you alive if you can not go back with the pay for the service.
Arrange with your banking to have you running with Merchant facilities so you can have credit cards such as Mastercard and Visa. The majority of people own credit cards and it would solve the issue of the client not holding a cheque book or not having the right amount of cash in their wallet.
Moreover, don’t be asked not to hold any goods til after the payment has been made. Know, until the goods have been paid for, they remain yours.
If you plan to let somebody credit, be sure you have got the following details about 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 record all this detail, telephone the bank and make sure that they do use an account with them. Then, ring each of the trade reference and request if they pay their invoices consistently or if they have any problems 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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