If you hate asking for money, get over it- get used to chasing customers to get paid- it is part of being in business. The cliché "a squeaky wheel gets the grease" is appropriate to managing your receivables. Don't assume any of your customers will pay you on time. If it is in your best interest to hold on to your cash as long as possible, it is also in their best interest to do likewise. The phrase "ask and you shall receive" is the motto of any experienced credit manager.

Protect your money. Make it a practice that all new customers wishing credit give you references. Be suspicious if a new customer insists on instant credit. And, be cautious of glowing credit reports from unknown references. Your applicant may be hiding a poor credit history. If you do receive reports of slow payment, be careful! A wise policy is to treat your customer requests for credit as your vendors treat you.

Make it a policy to give or send a bill immediately. I recently had some electrical work done on my home and had to call the contractor three times to obtain a bill. I wonder how many bills he forgot to send out and how many customers "forgot" to call him? Establish a firm rule that no service is to be performed or any merchandise shipped without an accompanying invoice.

Your customers will find it helpful to receive two copies of your invoice, one for their records and the duplicate to be sent back to you with the check. Receiving a copy of the invoice with payment removes any question of which invoice to apply the check.

Besides sending invoices, it is important to mail monthly statements listing your customer's payments and all unpaid invoices. Remember, some of your customers may not keep accurate records- losing or forgetting to record invoices. A statement tells your customer you are aware of what is owed to you and that you expect payment. Businesses that do not send statements are sending a message inviting exploitation by unscrupulous customers. The effects of statements are well worth the time and postage.

In upstate New York, there was a distributor of swimming pool supplies that refused to send statements to customers because, in the opinion of the owner," it is the responsibility of the customers to keep track of their bills.” He felt it sufficient to issue an invoice at the time of sale. Unfortunately, the customers did not, and he eventually was forced in to bankruptcy when his cash flow trickled to near nothing. When it comes to collecting money, it does not pay to stand on principle. It can be self-defeating.

It is not enough to insure you have a good cash flow by sending invoices and statements. You must aggressively manage your receivables. Here are some collection tactics that are effective and should not lose you your customer:

1. As soon as payment is past due, send a copy of the invoice to the customer with a notation requesting a check.
2. When you send out the statement, circle the past due invoices.
3. Handwritten notes on statements or invoices are more effective than computer printed messages or past due stamps and stickers. It alerts the customer that you personally are aware of the problem.
4. A phone call to the customer asking when you may expect a check.
5. Telling your customer that you have some large bills coming due, and you will appreciate a little help with a check, can be effective if not used too often.

If none of these tactics work, you may need to be more aggressive. You may lose the customer, but so what, if you cannot get paid. You will find that the older the bill, the less chance there is you will ever see your money. Bank loan officers and other credit managers, are well aware of the problem of past due debt. They know that the older the debt, the less possibility of collecting it.