Getting paid, as you would imagine is essentially the point in your business because if you aren’t being paid, what are you doing in business?
You may be laughing at the heaps of business people who only have their customer base to pay them when and if they remember it. I am acquainted with one tradesman who habitually gets bad debts like accolades. Why is that? Simply because he can’t bring himself to ask for the money and people can just use him.
If you give somebody credit, do so only if they have cleared their worth to you by paying cash on delivery (COD) for some period of time. Secondly, you should gauge whether they have the resources to pay you – if not don’t do business with them. Don’t trick yourself into thinking “I need the work” or “I need the sales”. It’s ultimately in doing the job or providing the goods for free if you do not get paid.
If you are the type of person who can’t demand the fee even after the service has been done, try these hints:
Tell your client that when the service is done, you will need cash or cheque. They should be likely to have it ready at the transacation and you don’t need to request your fee.
When you give out your quote, be sure your payment terms are clear.
Form an invoice with the terms of payment clearly printed and hand the client the invoice when the task is completed. They can take the invoice and reactively assume they need to pay the money now without you being required to say anything. Make up an “evil boss” who would torture you alive if you do not bring back the fee for the job.
Ask your banking institution to set you up with Merchant facilities so you can accept credit cards such as Mastercard and Visa. Many people use credit cards and it could prevent the issue of the customer not having a cheque book or not having the right amount of cash in their wallet.
Alternatively, don’t be persuaded against to keep hold on the goods til the payment is made. Understand, until the goods have been paid for, the goods are still yours.
If you choose to allow somebody credit, make sure you have got the following contact information off them some time 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
Once you take all this detail, call the branch and make certain that they do have an account at there. Then, call every trade reference and ask if they pay their invoices punctually 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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