Rule One of Business: Get Paid
Monday, July 5th, 2010Being paid, you would understand is fundamentally the point to your business because if you aren’t being paid, what are you doing in business?
You will be surprised at the number of business people who have their customer base to make payment when and if they get on with it. I know of a business owner who persistently gets bad debts like weeds. For what reason? Very possibly because he can’t bring himself to take the payment and lets people take advantage of him.
If you permit someone credit, do so only when they have proven themselves to you by paying cash on delivery (COD) for a period. Furthermore, you must gauge whether they have the resources to pay you – if they don’t then 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 ultimately doing the service or providing the goods for nada if you aren’t getting paid.
If you are the sort of person who can’t demand the fee after the service has been completed, try these hints:
Tell your client that when the job is finished, you will require cash or cheque. They should likely have it ready at the transacation and you don’t need to ask for your pay.
When you give out the initial quote, be sure your payment terms are plain.
Complete an invoice that has your terms of payment plainly stated and give the client the invoice when the job is completed. They should take the invoice and generally know they can pay the fee now without you needing to say a thing. Create an “evil boss” who will burn you alive if you can’t bring back the pay for the work.
Arrange with your banking to set you up with Merchant facilities so you can accept credit cards such as Mastercard and Visa. The large majority of people utilize credit cards and it can stop the problem of the client not operating a cheque book or not having the right cash at the time.
Otherwise, don’t be persuaded against to hold onto the promised goods until they have been paid for. Know, until the goods have been paid for, the goods are still yours.
If you decide you’re going to permit a client credit, be sure you have got the following contact details from them at a point 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
After you record all this information, call the branch and make sure that they use an account then. Then, telephone each 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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