Have Set Payment Methods and Payment Plans
If you’re in retail this probably doesn’t apply to you. Otherwise, read on and take control of how you get paid.
As part of the systems in your business, it’s a good idea to have set payment methods that make it easy for people to purchase your products and services.
Not only that, but you should also at least have some control over how you get paid.
I see too many business owners waiting to be paid, sending invoices, sending statements, reminders, all to get paid for work they’ve already done, and had to wear the expenses of delivering.
Payment plans can make it easier for people to say YES so can increase your sales. You just need to make sure you’re comfortable with offering to help those with a lesser budget still afford to take advantage of your services.
If you have your payment options prepared beforehand, when you go to sell this product it’s easier to negotiate with your potential client. You already know the options they have, so lay them out to them and let them choose.
Cashflow is king, so know what you can afford.
Some industries have set payment methodologies but I challenge you, to consider challenging those set methodologies.
My website industry as an example. Generally accepted that 50% deposit and 50% when the project is complete.
Yeah Nah, that was never going to work for me. I am putting my final payment under someone else’s control, not going to happen.
So we took control by making payment plans available, and it became a win-win situation, we had control, the clients got help to better manage their cash flow, and made it easier for them to say yes right then and there.
Here’s what we did.
We offered a deposit of only 25% which was considerably lower than the industry rate if they knew that they were duly impressed if they didn’t know that it made the risk of signing up more attractive as they’re parting with minimal investment to get started. Make sense so far?
Then the next payment of 25% is due 30 days later. Here’s the kicker, that payment is automated.
I simply tell people I don’t have time to chase payments, I just want to get on with delivering awesome websites for people, so we automate our payments so everything is on credit/debit card or direct withdrawal.
We use and recommend EWAY and EZIDEBIT.
Our final payment of 50% is due 30 days later, so 30 days from the previous payment. I will sometimes split that final payment into 2 equal payments if it helps me get the project across the line. Better to close the deal than not, but at the same time IF all my gigs were on a 4 part payment plan I might run into cash flow issues.
And that’s the big point here. You want to close more deals, get more gigs, but you do need to know what your costs of delivery are and what your business and cash flow will handle. Make sense?
The second point is you don’t want to be caught playing ‘accounts’ all the time chasing money, you don’t make money doing that. It’s just a time and stress drain.
Here’s the ‘clause’ I have in my project agreement: The deposit can be paid by direct deposit or by credit/debit card but the above periodical payments must be paid by credit/debit card direct debit or by completing a DDR (Direct Debit Request – Form).
Here are the payment methods available, in my order of preference: (Yours might be different depending on your industry)
1) Credit/Debit Card
2) Direct Debit Request
3) Bank Transfer – Deposit Only
Not in my list of best options:
5) Cash (I have taken cash but a pain in the butt coz I need to then go to the bank)
1) Create payment plan options for your higher-priced products or services
2) Know what the payment collection methodology your willing to accept.
3) TAKE CONTROL
Need help? Let’s talk ??