Proactive processes can help protect your company and its cash flow.
PREPARATION
Complete some due diligence before you decide to work with a client. Basic internet research for reviews can show how well the company is managed.
And when you start a contract with a customer, ensure that invoicing and payment details are provided. Spell out how you invoice and payment due dates so there’s no confusion. Be clear on what payment methods you accept and what your late payment policy is.
FOLLOW UP
If your client has a missed a payment due date, follow up immediately with a polite email reminder. And if you have contact information for the accounts payable department, reach out to them, as they will generally know why your invoice is unpaid. It could be that they’re waiting on approvals or missing information.
If the client continues to be delinquent despite your follow up efforts, perhaps you should stop providing products or services until you’re paid in full.