It is inevitable for small business owners to face some problems getting paid. When unpaid debts have piled up, business operations can be adversely affected.
But there are ways to prepare for the possibility of collecting business debts that are overdue. In fact, you can minimize late payments by taking some initial steps that would increase your ability to sense if an account is heading toward the bad debt territory. 
Late-paying customers fall into three types. The first type are those who want to pay but are faced with financial problems and can’t pay on time. The second type are those who opt to pay late or have to pay many debts and need to pay the urgent ones first. The last type are those who are really tough on avoiding paying their debts.
There is hope in the first two types. By communicating properly with these types of customers, you may be able to convince them to pay –either full or partially. It is often hard to deal with the last one and you may need to turn over the account to a collection agency.
There are many tips available on how to ensure that debts are paid. One is to make sure that you focus on the customer until you’re paid. Send notices promptly and regularly. You may need to remind a customer of their debt by calling, but there are very specific rules about this, so you may want to turn these accounts over to a collection agency that is trained in Fair Debt practices.
If the customer has the intention to pay but is facing financial problems, consider extending the payment terms but put whatever has been agreed into writing. Make sure to remind the customer by calling or sending notices. Letters are often necessary to ensure collection.
When all these actions have failed, get the service of a collection agency manage the delinquent accounts on your behalf. Debt collection agencies can offer tips on how to raise your collection rate and you will learn in the process which you can apply in the future.
