Rule One of Business: Get Paid
Being paid, you would figure is vitally fundamental to your business because if you aren’t getting paid, what’s the point in business?
You will be surprised at the amount of business people who only have their customer base to pay them when and if they feel like it. I am acquainted with one businessman who repeatedly makes bad debts like charms. Why? Very possibly because he won’t bring himself to demand the cash and people take advantage of him.
If you allow somebody credit, only do so if they proved their integrity to you by paying cash on delivery (COD) for a while. Moreover, you can find whether they have the resources to pay you – if not don’t do business with them. Don’t kid yourself into the pattern of “I need the work” or “I need the sales”. It’s damaging doing the job or providing the goods for zip if you aren’t getting paid.
If you are the kind of person who can’t request the fee even after the job has been completed, try these cheats:
Tell your client that when all the work is done with, you will need cash or cheque. They should be likely to have it there at the point of sale and you won’t have to ask for your money.
When you send out an initial quote, be sure your payment terms are evident.
Complete an invoice with your terms of payment simply listed and hand the customer the invoice when the work is completed. They will review the invoice and simply know they should pay the money now without you being required to say anything. Create a “cruel boss” who may burn you alive if you can not return with the payment for the work.
Ask your branch to set you up with Merchant facilities so you can use credit cards like Mastercard and Visa. The majority of people use credit cards and it will fix the problem of the client not holding a cheque account or not having the cash in their wallet.
Moreover, don’t be persuaded against to keep hold on the promised goods til the payment has been made. Don’t forget, until the goods are paid for, they still remain yours.
If you plan to let a customer credit, make sure you have taken the following contact information of them some time 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 record all this detail, telephone the banking institution and make sure that they do have an account there. Then, telephone all of the trade reference and find out if they pay their bills on time or if they have any dilemmas 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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