Rule One of Business: Get Paid
To be paid, just like you would realise is essentially crucial in your business because if you are not being paid, what’s the point in business?
You might be surprised at the number of business people who permit their customer base to pay them when and if they feel like it. I know of one trader who repeatedly makes bad debts like trophies. How is that? Just because he doesn’t bring himself to ask for the money and people just take advantage of him.
If you permit a client credit, do it only because they cleared consistency to you by paying cash on delivery (COD) for a while. Secondly, you can check whether they have the resources to pay you – if they don’t then do not do business with them. Don’t push yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless doing the work or providing the goods for zero if you aren’t paid.
If you are the sort of person who can’t ask for the money even when the service has been done, try these cheats:
Tell your customer that when the job is done with, you need cash or cheque. They will probably have it to hand over at completion and you will not need to request your pay.
When you send out a quote, make sure your payment terms are clear.
Form an invoice including the terms of payment evidently stated and give the customer the invoice when the task is completed. They can see the invoice and simply know they can pay the fee now without you being required to say anything. Manufacture a “vicious boss” who would burn you alive if you can’t return with the payment for the service.
Ask your banking to set you up with Merchant facilities so you can have credit cards for example Mastercard and Visa. The large majority of people own credit cards and it can solve the dilemma of the client not holding a cheque book or not having the cash in their pocket.
Alternatively, don’t be frightened to hand over the goods til after the payment is made. Don’t forget, until the goods are paid for, they still remain yours.
If you plan to let someone credit, make sure you get the following contact information about them at a time PREVIOUSLY you give 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, call the bank and make for certain that they have an account there. Then, call each trade reference and ask if they pay their fees correctly 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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