To get paid, like you would realise is fundamentally crucial at your business because if you are not getting paid, what are you doing in business?
You might be surprised at the number of business people who have their customer base to pay them when and if they remember it. I know a tradesman who repetitively makes bad debts like charms. Why is that? Just because he won’t bring himself to request the money and people intimidate him.
If you give somebody credit, do it only after they have proved themselves to you by paying cash on delivery (COD) for some period of time. Moreover, you can see whether they have the money to pay you - if they don’t then why do business with them. Don’t push yourself into saying “I need the work” or “I need the sales”. It’s damaging when you do the service or providing the goods for nothing if you are not getting paid.
If you are the type of person who can’t request the money after the service has been completed, try these ideas:
Tell your client that when the work is finished up, you will require cash or cheque. They should be likely to have it ready at the transacation and you do not have to ask for your pay.
When you hand out a quote, be sure your payment terms are evident.
Complete an invoice that has your terms of payment evidently listed and send the customer the invoice when the task is finished up. They will review the invoice and simply understand they should pay the fee now without you being required to say a thing. Fabricate an “evil boss” who would skin you alive if you do not bring back the fee for the work.
Ask your banking to hook you up with Merchant facilities so you can have credit cards like Mastercard and Visa. The majority of people own credit cards and it should stop the problem of the customer not operating a cheque account or not having the right amount of cash on hand.
As another option, don’t be asked not to hold onto the goods till after payment has been made. Know, until the goods have been paid for, they still are yours.
If you decide you’re going to permit a client credit, make sure you have the following contact details about them at a point BEFORE you give 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 detail, call the bank branch and make sure that they operate an account with them. Then, ring every trade reference and request if they pay their invoices consistently or if they have had any issues 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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