To be paid, as you would realise is vitally the point to your business because if you don’t get paid, what are you doing in business?
You will be laughing at the amount of business people who have their clientele to pay them when and if they remember it. I know such a tradesman who continuously makes bad debts like trophies. Why? Most likely because he cannot bring himself to request the cash and allows people to take advantage of him.
If you give someone credit, only do it when they have proven consistency to you by paying cash on delivery (COD) for a time. Secondly, you must check whether they have the cash to pay you - otherwise why do business with them. Don’t fool yourself into saying “I need the work” or “I need the sales”. It’s pointless when you do the job or providing the goods for nada if you aren’t getting paid.
If you are the type of person who can’t request the fee even after the service has been finished, try these tips:
Tell your client that when the service is completed, you need cash or cheque. They will be likely to have it to hand over at the transacation and you don’t have to request your payment.
When handing out the quote, be sure your payment terms are clear.
Create an invoice including your terms of payment plainly printed and give the client the invoice when the work is finished. They can look at the invoice and generally understand they have to pay for it now without you being required to say anything. Manufacture a “nasty boss” who may flay you alive if you don’t go back with the cash for the service.
Set up your bank branch to hook you up with Merchant facilities so you can have credit cards like Mastercard and Visa. The large majority of people have credit cards and it will cease the difficulty of the customer not having a cheque book or not having the cash at the time.
Alternatively, don’t be frightened to keep hold on the promised goods till after you’ve been paid. Don’t forget, until they’re paid for, the goods remain to be yours.
If you choose to give somebody credit, make sure you take the following details about them at a 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
When you record all this detail, contact the branch and make for certain that they do operate an account then. Then, ring each trade reference and ask if they pay their invoices correctly or if there are 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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