To be paid, just as you would figure is essentially important to your business because if you aren’t paid, what are you doing in business?
You will be astounded at the loads of business people who only have their customers to pay up when and if they remember it. I know of such a tradesman who continuously makes bad debts like weeds. Why, do you think? Very possibly because he doesn’t bring himself to demand the cash and people take advantage of him.
If you let a customer credit, only do so when they cleared themselves to you by paying cash on delivery (COD) for some time. Secondly, you need to gauge whether they have the means to pay you – if not do not do business with them. Don’t trick 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 nothing if you aren’t getting paid.
If you are the kind of person who can’t request the cash when the service has been done, try these tips:
Tell your customer that when the job is done with, you will require cash or cheque. They will probably have it to hand over at at the finish date and you don’t need to ask for your payment.
When sending out the quote, be sure your payment terms are simple.
Complete an invoice with your terms of payment evidently listed and hand the client the invoice when the service is done. They can see the invoice and reactively realise they have to pay the fee now without you having to say a thing. Invent an “evil boss” who will flay you alive if you do not bring back the payment for the service.
Ask your banking institution to set you up with Merchant facilities so you can use credit cards for example Mastercard and Visa. The large majority of people use credit cards and it will fix the dilemma of the customer not owning a cheque book or not having the right cash in their pocket.
Moreover, don’t be persuaded against to hold onto any goods til after you have been paid. Understand, until they’re paid for, the goods remain to be yours.
If you plan to give a customer credit, be sure you have taken the following contact information of them at a time PREVIOUSLY you allow them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
When you take all this information, ring the banking institution and make certain that they do use an account at there. Then, phone each trade reference and inquire if they pay their bills correctly or if they have 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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