Rule One of Business: Get Paid
To be paid, as you would figure is vitally fundamental in your business because if you aren’t paid, what’s the point in business?
You may be shocked at the heaps of business people who only have their customer base to simply pay when and if they get around to it. I know such a tradesman who habitually collects bad debts like accolades. Why is that? Simply because he cannot bring himself to demand the money and people can just take advantage of him.
If you allow a customer credit, only do it when they have cleared consistency to you by paying cash on delivery (COD) for some period. Secondly, you must gauge whether they have the resources to pay you - if they don’t then why do business with them. Don’t kid yourself into thinking “I need the work” or “I need the sales”. It’s pointless in doing the job or providing the goods for nothing if you aren’t getting paid.
If you are the type of person who can’t demand the fee after the service has been finished, try these cheats:
Tell your client that when the service is finished, you will need cash or cheque. They will likely have it there at at the finish date and you don’t need to demand your money.
When sending out an initial quote, be sure your payment terms are clear.
Do up an invoice including your terms of payment evidently stated and give the customer the invoice when the job is completed. They will review the invoice and generally understand they should pay for it now without you going to say a thing. Fabricate a “cruel boss” who would burn you alive if you can’t go back with the payment for the job.
Set up your banking to provide you with Merchant facilities so you can use credit cards like Mastercard and Visa. Many people utilize credit cards and it should solve the difficulty of the customer not holding a cheque account or not having the right cash in their pocket.
As another option, don’t be afraid to hold the goods till after you’ve been paid. Don’t forget, until the goods are paid for, they still remain yours.
If you plan to give a customer credit, be sure you have got the following contact information from them a week 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
After you record all this information, call the bank branch and make for certain that they have an account with them. Then, phone all of the trade reference and inquire if they pay their invoices consistently or if they have 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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