Also, make sure you're dealing with the person who actually controls the purse strings. Get a name and introduce yourself to that person, so you won't be just another account on the expense sheet. You want to be an individual that they know and recognize, [so] include personal notes with your invoices. When you have a relationship with the person in charge, it's much more difficult for them to turn you down when you ask for payment.Q: What specific steps can you take to help customers keep their commitments?A: Consider structuring the payments so they will be easier for your customers to make. It's partly psychological, so try to get the pressure off of that big lump sum they have to pay at the end of the transaction. When a company has a lot of pressure on them, they tend to disappear off your radar. Break the payment up into four pieces, perhaps, or collect more money up front. Don't be scared that you won't get the work if you ask for a larger deposit. When business tightens up, a number of companies do this, so you won't be alone.Q: What about chronic late-payers, those clients are almost always behind on their payment schedule?A: You know who those clients are, so you structure their contracts with the majority of your money coming in up front, before you start the job. Then, break up the later payments into smaller amounts so they are no big deal. You also need to continually assess whether it is worth the stress and extra work it takes to keep their business.
I might also mention the importance for every small business to have cash on reserve at all times, so they can get through tight economic periods. It's liquidity that will get your company through volatility like we're experiencing right now.