Rule One of Business: Get Paid
Getting paid, as you would understand is essentially important in your business because if you aren’t getting paid, what’s the point in business?
You might be laughing at the loads of business people who only have their customers to make payment when and if they get around to it. I know a business owner who always holds bad debts like accolades. Why is that? Probably because he won’t bring himself to request the cash and people overpower him.
If you allow a customer credit, only do it after they proved consistency to you by paying cash on delivery (COD) for a while. Also, you can find whether they have the resources to pay you - otherwise why do business with them. Don’t push yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless when you do the work or providing the goods for zero if you aren’t getting paid.
If you are the sort of person who can’t request the money after the work has been done, try these hints:
Tell your client that when the work is finished up, you need cash or cheque. They should probably have it there at the transacation and you do not need to ask for your money.
When giving out a quote, make sure your payment terms are visible.
Create an invoice including your terms of payment plainly listed and send the client the invoice when the task is finished. They can look at the invoice and simply know they will pay you the money now without you going to say a thing. Make up a “nasty boss” who might flay you alive if you can not return with the money for the service.
Arrange with your banking institution to set you up with Merchant facilities so you can take credit cards such as Mastercard and Visa. The large part of people have credit cards and it will cease the difficulty of the customer not having a cheque account or not having enough cash in their pocket.
As another option, don’t be frightened to hand over the goods till the payment has been made. Know, until the goods are paid for, the goods still are yours.
If you decide you’re going to permit somebody credit, make sure you take the following contact details about them some 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
After you record all this detail, ring the bank and make sure that they do use an account there. Then, call all of the trade reference and ask if they pay their bills correctly or if there are 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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