Rule One of Business: Get Paid
Getting paid, just like you would figure is essentially fundamental in your business because if you do not get paid, what are you doing in business?
You might be astounded at the heaps of business people who permit their customer base to pay up when and if they get around to it. I am acquainted with a business owner who repeatedly makes bad debts like charms. How is that? Probably because he doesn’t bring himself to demand the cash and people use him.
If you allow a client credit, only do so because they proved their worth to you by paying cash on delivery (COD) for some period. Also, you can see whether they have the money to pay you - otherwise do not do business with them. Don’t push yourself into thinking “I need the work” or “I need the sales”. It’s damaging doing the work or providing the goods for zip if you are not paid.
If you are the sort of person who can’t demand the cash even when the job has been done, try these tips:
Tell your customer that when the work is completed, you will need cash or cheque. They should likely have it there at completion and you don’t need to request your fee.
When you send out the initial quote, make sure your payment terms are visible.
Do up an invoice that has your terms of payment simply printed and send the customer the invoice when the service is finished. They should take the invoice and reactively realise they will pay the fee now without you going to say a word. Manufacture a “cruel boss” who may flay you alive if you can’t go back with the money for the job.
Set up your branch to set you up with Merchant facilities so you can take credit cards like Mastercard and Visa. The large part of people possess credit cards and it would fix the difficulty of the customer not holding a cheque account or not having enough cash on hand.
Likewise, don’t be asked not to hold the promised goods until after you have been paid. Know, until the goods have been paid for, the goods remain yours.
If you decide you’re going to give someone credit, make sure you have got the following details about them at a point BEFORE you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you take all this detail, ring the branch and make certain that they do operate an account there. Then, phone each of the trade reference and inquire if they pay their debts on time or if they have 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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