Isn’t life interesting? When everything is going along fine, we are hesitant to make any changes that might upset the apple cart–it’s only once we run into a problem that we wish we would have prepared! Running a home business is very much like that–at first, we’re just happy to start getting those first checks and payments–but as time goes on and we run into difficulties and issues, we wish we would have had something in place to help us avoid and deal with these problems. I thought I would write this morning about exploring whether or not your business needs a written payment policy…
A written policy does not have to be complicated. It can be a simple statement or paragraph stating what type of payments you accept (cash, check, money order, which credit cards, etc.) and when payment is due and/or considered late. You can also put in any information about what you’ll do if there is a bounced check or other payment issue. This is where you can write in whether or not you’ll charge a fee for late payments or bounced checks.
You can put your payment policy on your website or on any invoices, brochures, etc. that you might share with your customers or clients. If you have a price list or do up an estimate for your customers, you can include your payment policy. While not everyone will actually READ the policy when they first see it, having something well thought-out in writing can be a benefit if you run into trouble. You can refer to your policy and let people know what you will be doing to solve the payment problem. It also makes you appear quite professional and may actually help to keep payment issues from happening or coming up.
If you are a small, home-based business with only a few clients, it may seem a little “over the top” to have a payment policy–but the first time you try to collect from a customer who hasn’t paid or deal with a bounced check, you may change your mind!
See Also: Working with Challenging Customers and Clients, and Getting Comfortable Talking About Money, and Collecting on Outstanding Accounts