To be paid, just like you would understand is vitally important at your business because if you aren’t paid, what’s the point in business?
You may be surprised at the amount of business people who only get their clientele to simply pay when and if they get on with it. I know of a tradesman who repeatedly makes bad debts like charms. Why is that? Very possibly because he cannot bring himself to ask for the money and lets people overpower him.
If you permit a client credit, only do it if they have proven their integrity to you by paying cash on delivery (COD) for some time. Moreover, you must gauge whether they have the means to pay you – otherwise don’t do business with them. Don’t kid yourself into the line of “I need the work” or “I need the sales”. It’s pointless doing the service or providing the goods for zero if you do not get paid.
If you are the kind of person who can’t ask for the fee after the job has been completed, try these ideas:
Tell your client that when all the work is finished up, you will need cash or cheque. They should be likely to have it ready at the point of sale and you do not have to ask for your money.
When sending out the quote, be sure your payment terms are understandable.
Create an invoice including the terms of payment clearly listed and send the customer the invoice when the service is finished. They should look at the invoice and immediately know they need to pay the fee now without you needing to say a thing. Make up a “nasty boss” who may torture you alive if you do not leave with the cash for the job.
Set up your banking institution to provide you with Merchant facilities so you can use credit cards for example Mastercard and Visa. Many people own credit cards and it can fix the difficulty of the customer not owning a cheque book or not having the right amount of cash in their pocket.
Moreover, don’t be persuaded against to hand over your goods until after you’ve been paid. Remember, until they’re paid for, the goods remain to be yours.
If you decide you’re going to allow somebody credit, be sure you take the following contact information of 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 take all this detail, telephone the bank and make sure that they use an account with them. Then, phone all 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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