The easiest way is to get cash up front. However, for a variety of reasons, it may not be possible to do this. Even the act of taking a check or a credit card for payment adds some potential risk for a business owner. Some of the suggested tips for helping to avoid problems include:
- take commonsense actions such as asking for identification, working with your own banker for suggestions they might offer, and perhaps joining the Better Business Bureau
- let clients know up front what your payment expectations are
- use a check-protection service
- use written contracts
- invoice more frequently—maybe every two weeks instead of waiting 30 days
- follow up on slow payments soon and frequently
- encourage quick payment by offering a small discount
- for large projects, require some up-front payment.
At some time, all businesses will struggle with this issue. By doing some up-front and proactive work, an owner may be able to minimize some of these frustrations.
