Being paid, you would imagine is vitally the point to your business because if you are not getting paid, what’s the point in business?
You would be surprised at the amount of business people who only get their customers to simply pay when and if they get on with it. I know of such a trader who always collects bad debts like accolades. Why? Probably because he can’t bring himself to ask for the payment and people can just use him.
If you permit a client credit, only do it because they cleared their integrity to you by paying cash on delivery (COD) for a time. Moreover, you should gauge whether they have the means to pay you - if they don’t then why do business with them. Don’t fool yourself into the line of “I need the work” or “I need the sales”. It’s damaging in doing the job or providing the goods for nada if you are not paid.
If you are the sort of person who can’t ask for the money even after the service has been completed, try these hints:
Tell your client that when the work is finished, you will need cash or cheque. They should more than likely have it there at the point of sale and you won’t have to demand your pay.
When you send the quote, be sure your payment terms are understandable.
Form an invoice that has your terms of payment evidently listed and hand the client the invoice when the job is done. They can look at the invoice and reactively realise they will pay it off now without you being required to say anything. Create a “vicious boss” who would flay you alive if you don’t bring back the fee for the service.
Arrange with your bank to provide you with Merchant facilities so you can take credit cards for example Mastercard and Visa. The large majority of people own credit cards and it will prevent the difficulty of the customer not holding a cheque account or not having the right amount of cash at the time.
Otherwise, don’t be persuaded against to hold any goods til after you have been paid. Know, until they’re paid for, they still are yours.
If you decide you’re going to let a customer credit, make sure you have got the following information of them at a time PREVIOUSLY 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 possess all this detail, ring the branch and make certain that they do operate an account there. Then, ring each trade reference and inquire if they pay their debts on time or if they have any dilemmas 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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