Getting paid, you would realise is essentially fundamental at your business because if you aren’t paid, what are you doing in business?
You may be astounded at the heaps of business people who have their customer base to simply pay when and if they feel like it. I am acquainted with one businessman who continuously collects bad debts like weeds. How? Most likely because he can’t bring himself to demand the cash and people just intimidate him.
If you allow someone credit, only do so if they have proven themselves to you by paying cash on delivery (COD) for some time. Moreover, you should check whether they have the funds to pay you – if they don’t then you should not do business with them. Don’t fool yourself into the line of “I need the work” or “I need the sales”. It’s ultimately when you do the service or providing the goods for nada if you don’t get paid.
If you are the kind of person who can’t ask for the money even when the service has been done, try these cheats:
Tell your client that when the job is done, you require cash or cheque. They will be likely to have it there at the transacation and you do not have to demand your payment.
When sending out a quote, make sure your payment terms are understandable.
Create an invoice that has your terms of payment plainly listed and hand the customer the invoice when the job is done. They should see the invoice and simply understand they have to pay you the money now without you needing to say a word. Invent a “cruel boss” who may burn you alive if you can not leave with the cash for the work.
Organise your bank to have you running with Merchant facilities so you can use credit cards like Mastercard and Visa. Many people use credit cards and it would prevent the dilemma of the client not holding a cheque book or not having the right cash on hand.
Otherwise, don’t be afraid to hand over the goods until payment is paid. Don’t forget, until they have been paid for, the goods are still yours.
If you decide to permit a customer credit, make sure you have taken the following contact details from them at a point PREVIOUSLY you permit them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you possess all this information, contact the branch and make certain that they have an account with them. Then, ring each trade reference and request if they pay their invoices consistently or if there have been any difficulties 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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