We know many Office Live Small Business customers run service businesses. So I’m guessing a lot of you have had the distinct displeasure of dealing with slow-paying customers. Unlike retail environments where you don’t hand over the goods until you’ve seen a customer’s cash or credit card, a lot of service businesses bill for their work only after it’s completed.
It’s not a perfect system, but columnist Susan Schreter suggests a number of steps you can take to get the upper hand when dealing with delinquent receivables. Some of her tips are pretty easy to set in motion – such as shortening your billing cycles, including a clear due date on your statements, and charging penalties on unpaid balances. Others may require a little more work on your part – getting signed service agreements, requiring down payments, or in the case of the most serious offenders, heading to small-claims court. It’s all good information, and certainly a timely heads-up given the current economic climate where collecting money that you’re due could become even more challenging.
It’s also worth noting, as Susan does, that if you go to a bank or venture capitalist seeking money to grow your business, you’ve got to have your books in order. Potential lenders won’t be impressed by a company that can’t manage its receivables.
Whether you’re dealing with slow-pay angst now – or want to do all you can to avoid it – Susan’s column offers some very sensible advice.
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