Watch for new customers with a bad credit history. You can´t expect that a company or a person with a history of bouncing checks or paying their bills late will change their ways when dealing with you. If you must do business with the chronically late, lay down your credit rules early and firmly and start the relationship off slowly. Keep the amount of product or services you offer a company with an iffy credit record to a minimum until they´ve proven themselves worthy. And no matter how much you need the business, never start doing business with another person or company until you have a signed contract clearly stating and agreeing to payment terms.The latter forms  part of the Cunsomer Protection Act Reculations.

Those who expect to get paid, get paid.

In the administration and control of receivables, attitude counts. We've discovered that if you expect to get paid, and the other party knows it, and knows you'll take action if you are not paid, you will get paid.

It's simple: If you take it seriously, they'll take it seriously. On the other hand, if you treat receivables lightly, and allow your customers to take advantage of you, they will. What does "taking it seriously" mean? It means:

Once you begin doing business with someone, make sure you stamp your invoices with the date that payment is due to you. Don´t rely on the customer to look at the invoice date and add 30 days -- or whatever your payment terms are -- to determine the pay date.

Don't Turn Your Back on Them

Extending credit to another company involves risk. Of course, in most cases, the risk is part of the cost of doing business, and it is acceptable . . . so long as it is managed properly.

Untended receivables can get out of control in the blink of an eye. And out of control is the first step towards being out of business. Here are some danger signals you can watch for:

Phone customers and start trying to collect the day after a payment is due. Never wait -- let them know that you keep close track of your accounts receivable.

Stick to your guns

It's called "sticking to your guns". When you set terms, be determined to communicate them and to stick to them, no matter what. Remember, a deal is a deal. You've fulfilled your obligations, now it's their turn.

You do it by stating your terms and intentions with clarity and firmness. If you are vague and easygoing about your terms, it's more likely that people you deal with will be vague and easygoing about paying you.

It's important to develop a set of reasonable terms and conditions, and it's important to make them part of your customer agreement.

Until a customer pays their bills, don´t do any more business with them. Do not bend on this rule -- you´ll only cause yourself more problems and scuttle any chance of collecting what you´re owed. If you really want to keep doing business with a customer who owes you, insist that any new products or services they receive from you are c.o.d. -- cash on delivery.

Say What you Mean and Mean What you Say.

We have already said that in order to prevent problems, it's important to set terms and stick to them. Now, extend that thinking to situations where a problem already exists and you're trying to collect.

Every time you make a contact with the debtor, you must use the call to:

• Push for a resolution (you get paid) or
• Establish the next steps to be taken (call back, send a courier to get a check, repossession, legal action, etc.)

To keep your control, you must keep your word. If you say you are going to call back for an answer or a response at 2:00 p.m. on Tuesday, do it. If you tell a debtor that you are going to cut off their credit, do it. If you tell them that the matter is going to a professional collector, send it.

If you keep your word, and do exactly what you promise, you will always have the upper hand, and you will have a better chance of collecting.

Be prepared

It is understandable that some people are reluctant to make collection calls. After all, discussions of money can be uncomfortable and nerve-wracking.

Organize your facts, discuss what you might want to say, and, most importantly, decide what you want to achieve with the call.

Make a list of objections you might hear, and determine how you will handle them. For example, what if the person you are trying to collect from responds with the classic line, "The check is in the mail"? Most people will feel relieved and say "Great! Thank you very much" and end the call. Big mistake. Your response should be:

Be persistent

From the Dun & Bradstreet web site and Creative Debt Collecting by Dr Neil Flanagan