Best way to prevent overdue accounts is to avoid doing business with customers who have bad credit histories
From: allbusiness.com
As a growing business, you often have no choice but to do business with anyone who wants to do business with you. The reality is that your biggest and best credit card processing clients want to be billed quarterly and then have 60 days to pay you. These five steps can help your cash flow without endangering it.
1. Watch for new customers with a bad credit history. And no matter how much you need the business, never start doing business with another person or company until you have a signed contract clearly stating and agreeing to payment terms.
2. Once you begin doing business with someone, make sure you stamp your invoices with the date that payment is due to you.
3. Offer discounts for early payment and add interest to late payments. A typical discount is two percent to three percent off the total if the bill is paid within 10 days of the invoice date. The maximum amount of interest that can be charged varies by state.
4. Phone customers and start trying to collect the day after a payment is due.
5. Until a customer pays their bills, don’t do any more business with them.
As a growing business, you often have no choice but to do business with anyone who wants to do business with you. The reality is that your biggest and best credit card processing clients want to be billed quarterly and then have 60 days to pay you. These five steps can help your cash flow without endangering it.
1. Watch for new customers with a bad credit history. And no matter how much you need the business, never start doing business with another person or company until you have a signed contract clearly stating and agreeing to payment terms.
2. Once you begin doing business with someone, make sure you stamp your invoices with the date that payment is due to you.
3. Offer discounts for early payment and add interest to late payments. A typical discount is two percent to three percent off the total if the bill is paid within 10 days of the invoice date. The maximum amount of interest that can be charged varies by state.
4. Phone customers and start trying to collect the day after a payment is due.
5. Until a customer pays their bills, don’t do any more business with them.
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