Getting paid, just as you would understand is essentially crucial at your business because if you are not getting paid, what’s the point in business?
You might be shocked at the amount of business people who have their customers to pay up when and if they feel like it. I know of a businessman who continuously makes bad debts like trophies. Why, do you think? Probably because he doesn’t bring himself to take the cash and allows people to use him.
If you allow someone credit, only do so if they cleared their worth to you by paying cash on delivery (COD) for a period. Furthermore, you need to gauge whether they have the cash to pay you – if they don’t then you shouldn’t do business with them. Don’t fool yourself into thinking “I need the work” or “I need the sales”. It’s pointless to do the work or providing the goods for free if you aren’t paid.
If you are the type of person who can’t demand the payment after the service has been finished, try these ideas:
Tell your client that when the job is done, you need cash or cheque. They should probably have it to hand over at at the finish date and you do not need to demand your fee.
When you hand out the initial quote, be sure your payment terms are understandable.
Form an invoice including your terms of payment evidently listed and hand the customer the invoice when the service is done. They can take the invoice and simply know they should pay you now without you needing to say a thing. Manufacture a “cruel boss” who would torture you alive if you can’t go back with the money for the work.
Arrange with your banking institution to hook you up with Merchant facilities so you can take credit cards such as Mastercard and Visa. Most people possess credit cards and it will prevent the problem of the client not having a cheque book or not having the right cash on hand.
Moreover, don’t be frightened to hold the goods until you have been paid. Remember, until the goods have been paid for, they remain to be yours.
If you decide to give someone credit, make sure you take the following contact information off them some time PREVIOUSLY 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 possess all this detail, call the branch and make sure that they use an account with them. Then, telephone every trade reference and inquire if they pay their fees correctly or if they have had 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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