New year, new business moves!
Welcome to 2019 and to more ground shaking content we will be sharing with you to help you and your startup grow and thrive this year.
We hope you have your business goals for the year set, with a killer strategy in place.
To start off, here’s a guide to avoiding bad debts this year. Yes, bad energy needs to stay far away.
1. Research on the Customer.
The credit worthiness of a potential customer is key in ensuring bad debts are avoided ab initio – from the very start of a business relationship.
2. Ask for an Initial Deposit
Include getting paid an initial deposit as a term and condition for the service or sale to reduce the risk of not getting full payment. A customer who pays a substantial amount as a deposit is more likely to pay the rest as he or she has already invested in that contract.
3. Set Clear Payment Terms and Conditions
You must have a contract of sale in place before processing the sale of your goods or services. You can engage the services of a lawyer to help you draft one.
As a startup owner, ensure the terms of payment, as well as the preferred payment method is included in the contract. Also, make these terms visible on your website and send a copy with your goods and invoices.
You do not want this area of your pre-sale to be ambiguous or unclear, or it might lead to bad debt. Communicate the dates, channel and frequency of payment as clear as possible to avoid stories that touch in the future.
4. Use Technology to Record your Payments and to Help you be More Organised.
Tracking your invoices and due payments is another key way to ensure your debts don’t go bad. Technological tools that help you track payments make sure you don’t lose track of a due payment or let such go unrecorded due to human error.
Accounting apps such as the Wave app allow you create and track invoices, payments and scan receipts so as to reduce the risk of improper invoicing or recording of payments.
5. Put a Phone Call Through when an Invoice Becomes Overdue.
Phone your customers when their invoices become overdue, as routine letters tend to be ignored. A diplomatic approach generally works best, particularly when you want to have a continuing relationship with your customers.
And as a bonus: Hire a great lawyer that helps you set needed legal boundaries that minimize bad debts this new year.
Engage one right on DIY Engage.