If your business allows customers to "buy first, pay later", chances are eventually you will have a customer who is very late at paying your bill, or even doesn't pay at all. Although there isn't any way of eliminating this problem 100%, there are steps you can take to avoid it.

1. Run Credit Checks
Set up a standard form for new customers to fill out. This form should contain their name, phone number, and address as well as at least three credit references. A credit reference can be a bank or company that they have done business with for a length of time. You will want to verify their references by calling them directly or faxing a form to them to fill out.

2. Invoicing
Make sure to send out your invoice as soon as the work as been completed/product has been shipped. Be sure to specify on the invoice when you expect to be paid by. You should send out monthly statements to your customers to remind them to pay you. If their account becomes significantly overdue, you may want to stamp "overdue" on the statement.

3. Contacting your Customers
If your customer is not receptive to your invoice/statement, you may want to call them directly to ask for payment. Make sure to let them know what their account is overdue by and that you expect payment immediately. You want to be nice, but assertive. If this is a customer who has always paid you in a timely manner but has recently been having a tough time financially, you may even want to work out a payment plan with them.

4. Contacting a Collection Agency
If your customer does not pay after you have gone through the steps above, you may wish to report them to a collection agency. For a fee, a collection agency will attempt to collect the unpaid balance. You can also have the collection agency report the claim to a credit reporting agency.

Remember to keep your cool when dealing with this situation. If you publicly announce the circumstances or make harassing/too many phone calls, you can be sued. Also, handling the situation in any manner but calm and professional can ruin your reputation as a business.

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Anita DeFrank, owner of MommysHelperOnline.com is a busy work at home mom. MommysHelperOnline.com is the leading resource available online built to assist you with your home business. Whether you're brand new to the work at home game or you're an old pro, stop by today.

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