Running a business is hard enough without having to chase up payments from your customers. Here are some measures you can take to prevent yourself from having to deal with the profitability imbalance, negative client relation, and legal ordeals that come with chasing up owed debt.
Research the customer:
Before you enter into an agreement with a client or other businesses, make sure that you know who you’re dealing with and do some research. There are government certified websites available to check whether a company is registered and legitimate. Find out about their history, make sure they are reliable, still in operation and to look for any bad reviews and other people’s experiences with them.
Have a signed contract:
Regardless of how much you trust your client, it is still a good idea to have a written contract in place so that everyone is on the same page and you have evidence to refer to in the case of a dispute or confusion. The contract should consist of the terms and agreements, payment schedule, preferred payment method, the exact product or service to be completed and late payment policy.
Have a good invoicing system:
Make sure that you invoice customers quickly with professional and easy to understand statements. This helps you keep track of your customers and helps your customers understand the payment requirements. You can set payment terms and policies to ensure that you will be paid how you and your customer agreed.