Terms of payment will be abused by even your best clients if you allow them to take advantage. When setting payment terms, your first thought should be of yourself. Never become accustomed to extending credit or giving discounts when they are not deserved. The following tips can help you create the best terms of payment for your computer consulting business.
TIPS FOR SETTING PAYMENT TERMS
1. Don’t use net 30 to set your terms of payment, otherwise known as stolen discounts. Instead use net seven or net ten so you don’t appear to be giving discounts.
2. Don’t use the term “payment on receipt,” since you don’t know when they will receive it.
3. Set a specific payment due date on your invoice.
DEALING WITH PAST DUE PAYMENTS
When payments go past due, you have to find a way to collect your money:
1. Delay the non-paying clients’ appointments for a week to try to get the point across that you need payment before continuing work.
2. Pick up the phone rather than faxing or sending a letter or emails. You will often get what you want when your clients are forced to talk to you.
3. Make a personal visit.
Regardless of how you collect, don’t let late payments extend beyond two terms. Move quickly to get money owed if the payment goes beyond 28 days late.
The best way to set terms of payment is defensively. Make decisions in your best interest and collect money up-front whenever possible to keep relationships strong and get the money you are owed as efficiently as possible.
Blogged By: Computer Consulting Kit