To get paid, just like you would imagine is vitally important at your business because if you are not paid, what’s the point in business?
You would be shocked at the loads of business people who permit their clientele to pay up when and if they get on with it. I know a trader who habitually makes bad debts like accolades. How is that possible? Simply because he doesn’t bring himself to demand the payment and lets people take advantage of him.
If you let a customer credit, do it only because they have proved themselves to you by paying cash on delivery (COD) for a time. Secondly, you need to see whether they have the means to pay you – if not then you shouldn’t do business with them. Don’t fool yourself into saying “I need the work” or “I need the sales”. It’s ultimately when you do the service or providing the goods for zip if you are not paid.
If you are the kind of person who can’t request the fee after the service has been done, try these hints:
Tell your client that when the work is finished, you need cash or cheque. They should more than likely have it on them at the point of sale and you do not have to demand your fee.
When you send your quote, make sure your payment terms are clear.
Form an invoice including your terms of payment clearly stated and hand the client the invoice when the work is done. They should look at the invoice and generally realise they should pay for it now without you being required to say a thing. Invent a “cruel boss” who may torture you alive if you can’t bring back the payment for the work.
Ask your banking to set you up with Merchant facilities so you can take credit cards like Mastercard and Visa. The majority of people use credit cards and it will prevent the dilemma of the client not having a cheque book or not having the cash at the time.
Otherwise, don’t be asked not to keep hold on the goods til after you’ve been paid. Understand, until they’re paid for, the goods remain yours.
If you plan to let a client credit, be sure you take the following details from them at a point PREVIOUSLY you permit them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you have all this information, telephone the bank and make for sure that they do use an account with them. Then, contact each trade reference and ask if they pay their fees on time or if they have had 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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