How to Collect from Anyone Even Enron Last One

22. Don't wait for a reason to call. Foresight's Nettie Morrison monitors the business press. She does that not only to stay alert about potential mergers (and bankruptcies) among her company's customer base but also to have an excuse to pick up the phone and chat up a client. For example: A client might be in the news because it is debuting a new product or having a strong earnings quarter. Morrison calls to congratulate the customer and winds up shooting the breeze, and as a result she develops better relationships with her customer contacts.

Come to Terms

23. Work with difficult customers. Your company has its own procedures for billing, but they should be secondary to those of your customers, insists Kadet. If your customer, as a rule, does not pay vendors in less than 60 days, then prepare to accept that -- don't start harassing the customer just because your terms are net 30. Similarly, be a perfectionist when it comes to following customers' instructions. Is the shipping address different from the billing address? Should you enclose a separate "shipping invoice" document with your regular invoice? Does the customer have unusual rules such as enforcing its "do not ship after" dates? You must comply -- if you want to keep the customers. After all, if you don't go along with their system, you're virtually guaranteeing a nonpayment.
24. Learn to improvise. You like to get paid within 30 days, but your customer expects to pay within 60 days. Does your cash flow have to suffer? Larkin Enterprises' Cullen Williams suggests altering your pricing structure. Perhaps you ask for an initial deposit. Maybe you make your first bill larger than it normally would be. Or perhaps you offer the customer a discount for paying in 30 days. The important thing is that you learn to match your expectations with your customer's needs -- without crippling your own business.

25. Don't hesitate to negotiate. Your company needs cash. Your customer does too. Is there a middle ground where you can meet? Negotiating a payment schedule is one idea. It doesn't have to be anything fancy. You can ask a late-paying customer to commit to giving you half now and the rest next week. Seeking a smaller amount might make it easier for an accounts-payable employee to cut you a check. And partial payment today is always better than no payment tomorrow.

26. Ask for the oldest first. Another test-driven tip from Tracy Wald: If a customer owes you for more than one invoice, you should start by looking to collect on only the oldest invoice. "Asking for all of them at once can seem too insurmountable," he says. And the collecting "tends to get easier once you've gotten the oldest one." Plus, he adds, by asking for payment on only the oldest invoice, you are subtly currying goodwill with the customer, who'll appreciate your leniency in not demanding the entire debt.

Protect Yourself

27. Think like a landlord. Maybe you are so eager for business that you will welcome any customer. At the same time, a prospective customer may strike you as the type that may prove to be an unreliable payer. One thing you can do, simple as it sounds, is request a deposit before beginning your work. How much you request is up to you -- there are no rules here. It's simply a case of striking a balance between pleasing customers and maintaining your cash flow.

28. Think like a retailer. Last year, for the first time since he's been in business, Rolf Albers began accepting credit-card payments. That may seem unremarkable, but Albers's customers are not consumers -- they're corporations like Lucent Technologies, Emerson Electric, and other makers of telecommunications and electronics equipment. So Albers, accustomed to receiving corporate checks, never thought he needed to accept credit cards. But he noticed that the following scenario happened a lot: A customer's employee would be in the field wiring up business phones and would suddenly discover that he needed a part. The installer would call Albers directly -- as opposed to going through his own company for the part -- which would allow him to complete the job on the same day and not disappoint his customer. The installer would typically say something like, "Just bill it to my company." And Albers, wanting to please his own customers, would comply. But that led to all sorts of collection disputes and problems. Typically, installers would forget to tell their companies that they'd needed the extra part. So now Albers accepts credit cards from the installers and contractors who work for his large customers. That way, the installer or contractor can still get a part immediately, but now it's the installer or contractor who is facing the cash crunch. Albers gets paid right away, albeit minus the credit-card merchant fees.

29. Follow the money. You're in payment discussions with a CEO. You're thinking that you've finally knifed through the red tape and made your way to the person who has the authority to pay you. Don't be fooled. Sometimes even CEOs have little choice about where their company's money goes. Some CEOs, for example, face dire financial consequences if they don't periodically pay down their credit line. Other CEOs don't even call the shots -- they might be indentured to a group of equity investors with a majority share of the company. That scenario is especially common if you deal with high-tech start-ups. In either situation, include the company's powerful financial entities in your collection efforts. For instance, let's say that the contact person at your customer's company breaks a promise to you. When you follow up with that person by E-mail, "cc" not only the contact's supervisor or CEO but also the company's banker or investors. If taking that step seems severe, then don't do it -- but you can certainly threaten to do it at a later date if the customer continues to break its commitments.

30. Be enterprising and relentless. We'll conclude with another tale from Tracy Wald's adventures in collecting. Wald has actually gone so far as to look up home numbers in the phone book and contact delinquent payers at home. He says he's called at "ridiculous hours" of the day. "Those are measures of last resort," he warns. "But it's not unreasonable to expect to be paid if you met their commitments."

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