If a business owner offers their customers terms at some point, they will have to deal with a customer who does not pay within the stated terms. Slow paying customers put a strain on the company’s cash flow and can jeopardize future projects.
The key to collecting past due invoices is to be pro-active as soon as an invoice is late. Asking your customer why the invoice has not been paid yet is the first step. You want to make sure that payment is not being withheld because your customer has a problem with your product or service.
If you find out that your customer has a cash flow problem, and that payment is forthcoming be polite but firm asking for a definitive date when you will have payment. Follow up immediately with an email that includes the agreed – on date payment will be made.
If the customer misses this payment you need to demand payment immediately. Depending on the relationship you have with the customer, the amount of the past due invoice, and your cash flow situation your options include:
- Report the past due invoice to credit reporting agencies.
- Turn the invoice over to a collection agency.
- File a claim in smalls claim court.
- Hire an attorney to collect the past due invoice.
- Write the invoice off as a loss.
American Receivable has helped companies deal with cash flow issues for 43 years. We are experts at helping our clients mitigate credit risk while speeding up their cash flow. Call us today at 800-297-6652 or schedule an appointment to learn how accounts receivable factoring improves small business cash flow. In the DFW area, call 972-404-4726. To find out how invoice factoring can help get your small business off the ground, call Jack Stieber or Brad Gurney or complete our quick application form.
