Business Collection:
Five Tips for Getting Paid Faster

Effectively collecting on business debt is usually simpler than we think.

It basically comes down to this: We teach people how to treat us. When we accept being put off by a client, we teach him or her that it's okay to put us off.

When we don't hold our clients to paying in a timely manner, we teach them to take advantage of us. And you can't blame the client for paying late if you haven't set the rules.

If you've done your homework and selected good clients, you probably won't have to deal with them trying to take advantage of you. Unpaid business debt is more often a matter of the client wanting to hold onto cash for as long as possible.

You don't necessarily need a crowbar to pry loose what you have coming. But you ARE entitled to be compensated for your work, in as timely a manner as you establish and agree upon.

If you have past-due invoices, it's time to get paid!

Five ways to motivate your clients:

1. Send out past-due invoices stamped PAST-DUE. Best to use red ink for the stamp, and include the original date the invoice was due. Enclose a self-addressed, stamped envelope to make it easy for them to send the check.

2. Contact your client directly. Get on the phone! Remind them of their overdue balance and ask when you can expect to receive payment.

3. Mail invoices with a return receipt, or send them in a USPS Priority Mail envelope with delivery confirmation.

4. Include a letter stating the original due date, invoice number, purchase order number, your account number, total amount due, applicable interest, and any other necessary info.

If your client still doesn't pay, there's one more step to try before sending the account into formal business collections:

5. Freeze the account. Stop providing services or goods until the account is brought current.

When you follow up, make sure that you talk with someone who can authorize payment. Ask if there are any discrepancies on the invoice, and let them know that their business is important to you. Then ask when you will be paid.

It's best to have a credit policy already in place when you enter into an agreement with your clients. If they violate your policy, consider whether it's worth your time to pursue them for future work. Keep in mind that the best way to get paid faster is to replace slow-paying clients with others who are as professional in their business dealings as you are.

Also see:

Business Collection - How to Make Sure You Get Paid
Business collection techniques to motivate slow-paying clients.

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