Rule One of Business: Get Paid

To get paid, just like you would figure is essentially crucial in your business because if you do not get paid, why are you in business?

You will be laughing at the loads of business people who only have their customers to simply pay when and if they remember it. I know of such a tradesman who persistently holds bad debts like accolades. For what reason? Very possibly because he can’t bring himself to ask for the money and people just use him.

If you let someone credit, do so only after they proved their worth to you by paying cash on delivery (COD) for some period of time. Moreover, you must see whether they have the means to pay you - otherwise don’t do business with them. Don’t kid yourself into the pattern of “I need the work” or “I need the sales”. It’s fruitless in doing the service or providing the goods for nada if you aren’t paid.

If you are the type of person who can’t ask for the cash after the service has been done, try these hints:
Tell your customer that when the service is done with, you require cash or cheque. They should be likely to have it there at the transacation and you will not need to ask for your money.

When you hand out a quote, be sure your payment terms are visible.

Create an invoice that has the terms of payment evidently printed and give the customer the invoice when the service is completed. They can look at the invoice and reactively understand they need to pay you for it now without you going to say a word. Fabricate a “vicious boss” who will skin you alive if you do not go back with the cash for the job.

Set up your bank to provide you with Merchant facilities so you can use credit cards such as Mastercard and Visa. Most people use credit cards and it would solve the difficulty of the client not having a cheque book or not having the cash at the time.

Otherwise, don’t be frightened to hold the goods till the payment has been made. Know, until they have been paid for, the goods still are yours.

If you plan to give a client credit, be sure you have taken the following contact information from 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

When you record all this information, call the bank and make for sure that they operate an account at there. Then, call all of the trade reference and ask if they pay their bills punctually or if there have been 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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