The Constant Entrepreneur: Advice for Running a Productive Business

Collecting Money. As money gets tight, it is increasingly hard for the small business to collect payments on time. It seems no matter what payment terms are set, the check always seems to be written later. This is especially tough when selling to large companies that demand 45, 60, or even 90 day terms!

Here is a collection tip that I have used in the past. It really works!

Befriend the accounts payable (A/P) clerk who handles your account. Get on a first name basis with her (usually, but not always a ‘her’). On the day before an invoice due date, call the A/P clerk and, in a friendly tone, ask if the check will be going out tomorrow per the invoice terms.

The response will be one of the following:

1. Yes – the check will go out tomorrow
2. The check as been delayed until … due to ….
3. I have the invoice but it has not been approved for payment
4. I do not have the invoice

If the answer is number 3, the clerk will usually advocate for you and see that the necessary approvals are received. She has also provided you information you can use to follow up with your purchasing contacts.

If the answer is number 4, immediately fax a copy of the invoice to her and she should be able to flow it through the company’s systems.

This tip will usually assure that payment is made on time – and if it is not, at least you will know why.

Will Limkemann
Limkemann Business Advisors
440-871-0976
www.neobizadvisor.com
will@limkemann.net