To be paid, just as you would realise is essentially important in your business because if you aren’t paid, why are you in business?
You will be astounded at the amount of business people who allow their customer base to make payment when and if they feel like it. I am acquainted with such a businessman who continuously holds bad debts like weeds. Why? Simply because he doesn’t bring himself to demand the money and people can just overpower him.
If you allow a client credit, do so only because they proved their integrity to you by paying cash on delivery (COD) for a period. Secondly, you need to gauge whether they have the cash to pay you - if not you should not do business with them. Don’t fool yourself into thinking “I need the work” or “I need the sales”. It’s ultimately to do the work or providing the goods for zip if you aren’t paid.
If you are the type of person who can’t demand the cash when the service has been done, try these tips:
Tell your customer that when the service is done, you will require cash or cheque. They will probably have it ready at the point of sale and you don’t need to request your fee.
When you give out your quote, make sure your payment terms are clear.
Do up an invoice including the terms of payment evidently printed and give the client the invoice when the work is finished. They should review the invoice and immediately understand they can pay you now without you being required to say a word. Manufacture a “vicious boss” who would burn you alive if you don’t go back with the payment for the work.
Organise your bank to set you up with Merchant facilities so you can have credit cards like Mastercard and Visa. The majority of people utilize credit cards and it could cease the difficulty of the customer not owning a cheque book or not having the cash on hand.
As another option, don’t be frightened to hold your goods until after payment has been made. Don’t forget, until they have been paid for, they still are yours.
If you decide you’re going to allow a client credit, be sure you have taken the following contact details off them at a point PREVIOUSLY you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you have all this information, call the banking institution and make for certain that they use an account at there. Then, call each trade reference and inquire if they pay their bills on time 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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