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Collecting past due debts may be one of the biggest ongoing challenges a business will face. Wasted time and labor, cash flow issues and inaccurate financial forecasts are among the problems a business could encounter when payments are not coming in on schedule. But there are things that can be done to help a business get paid faster.

Transfac Capital CFO John Thompson offered these tips for speeding up the accounts receivable process.


1. After goods or services have been provided, send out an invoice immediately.

2. Instead of asking for payment within 30 days, shorten the credit terms by asking for payment within 15 days.

3. Charge interest or come up with a payment plan for customers that carry a balance more than 30 days. Charging interest can be tricky, be sure to follow all state and federal laws before implementing this practice.

4. Take the hassle out of the billing process and use a company like Transfac Capital to handle financing, billing and collections.

5. Accept payments via credit cards and wire transfers to give your customers an added level of ease when paying you. You could even offer an automatic payment plan and avoid the invoice process.

6. Be sure your sales contract includes information about payment terms, payment methods that will be accepted and penalties for past due payments.

7. Instead of sending out invoices just once a month, consider shortening the internal billing cycle by sending out invoices once a week.

8. Ask for a deposit before providing any goods or services to help avoid non-payment risk. If a customer is unable to afford a deposit, then there’s a good chance they won’t be able to afford the end product. It might be inconvenient for the customer, but it sets the business up for non-payment risk without it.

9. Take time to talk to customers who are consistently late with their payments to see if there is something that can be adjusted. It may be something as simple as changing the due date to a mid-month payment instead of one near the first of the month.

10. As soon as the payment is late, call or email the customer to remind them the payment is due.

11. Offer an early payment discount. For example, you could give a 2 percent discount for customers who pay within 10 days.

12. If it makes sense, ask for payment upfront, even before you have provided the product or service. This can help avoid the hassle of chasing down a payment later.

Having overdue accounts can be especially detrimental to small businesses that are depending on payments for day-to-day operations. Implementing these tips can help improve your cash flow, saving your company time, energy and money, which can be spent on other business needs.

If help is needed beyond what is being done internally, carefully select a professional organization that can help you navigate some of the more intricate ins and outs of accounts receivable and debt collection.

Author Bio:

Kellie Englehardt is a Salt Lake City based blogger on behalf of Transfac Capital. Kellie graduated from the University of Utah in Mass Communications. In her free time she enjoys traveling, skiing, doing art projects and exploring Utah.