If you’re in the B2B realm, chances are you spend a considerable amount of time chasing down receivables. How much time to spend on the phone getting your customers to pay you?

2 hours/week?

4 hours/week?

Here’s some quick tips…

Change your payment terms

If you’re not already doing it, offer 2/10 Net 30 payment terms. Offer your customers a 2% discount on any invoice paid within 10 days of invoicing. Otherwise, it’s full price on net 30 terms.

The gain in cash flow is worth more than the 2% and more importantly, this will probably cut your problem accounts in half.

This is by far the best advice I can give you and the easiest to implement.

Stop working

This is simple. There’s no need to get angry or confrontational with your clients, just explain that your iron-clad policy is no work for over-due accounts until payment is received. Call them or send them an email saying:

Dear <customer>. I noticed that your invoice #55555 is now past-due. We really value our relationship with you so I’m sure this is just an oversight on your part. We will begin working on your project once again upon receipt of your payment against this invoice. If you believe there to be an error with invoice #55555, please contact <A/R person> at 555-1212 as soon as possible.

Write it off

Don’t bang your head against the wall for too long (in most cases). If it’s not a material sum of money, it’s not worth your time to chase it for more than 200+ days past due. Chances are, if it’s that badly past due, you aren’t going to get paid anyway - write it off as bad debt. Check with your accountant on this and agree on a policy of when to cut your loses.

Welcome back again!