Rule One of Business: Get Paid May 28, 2010 at 2:05 pm
To get paid, just as you would figure is fundamentally fundamental to your business because if you are not being paid, what are you doing in business?
You will be astounded at the loads of business people who allow their customers to pay up when and if they remember it. I know of such a businessman who always holds bad debts like awards. Why? Just because he can’t bring himself to demand the cash and people just overpower him.
If you allow somebody credit, only do it when they proved consistency to you by paying cash on delivery (COD) for a time. Moreover, you need to find whether they have the money to pay you – if they don’t then do 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 to do the service or providing the goods for zip if you aren’t paid.
If you are the kind of person who can’t ask for the cash even after the job has been finished, try these ideas:
Tell your client that when the job is completed, you need cash or cheque. They will likely have it on them at completion and you will not need to ask for your money.
When handing out the initial quote, be sure your payment terms are simple.
Form an invoice that has your terms of payment plainly stated and hand the client the invoice when the job is finished up. They will take the invoice and generally know they need to pay you for it now without you having to say anything. Create a “vicious boss” who will flay you alive if you can’t return with the pay for the work.
Set up your banking to provide you with Merchant facilities so you can use credit cards such as Mastercard and Visa. Many people own credit cards and it can stop the issue of the client not owning a cheque book or not having enough cash in their pocket.
Moreover, don’t be frightened to hold any goods til after they have been paid for. Understand, until they have been paid for, they remain yours.
If you plan to give someone credit, make sure you have taken the following details from them some time BEFORE you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you possess all this information, telephone the branch and make for sure that they do have an account there. Then, phone each of the trade reference and request if they pay their bills correctly or if they have 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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