The Best Ways to Prevent Overdue Accounts

The best way to prevent overdue accounts is to avoid doing business with customers who have bad credit histories.

"If it were only that simple," you say. If you limited yourself to doing business with companies with a spotless credit record, your pool of potential customers would be quite small. And unfortunately, as a growing business, you often have no choice but to do business with anyone who wants to do business with you. Even then, you don´t always have complete control of the terms of your sales agreements. The reality is that your biggest and best clients want to be billed quarterly and then have 60 days to pay you. And you certainly don´t want to cut off those clients.

While you don´t want to destroy any potential or established business relationships by laying down harsh payment terms, you must take some control of your account receivables to avoid wreaking havoc with your cash flow. You´re not a bank, after all.

These five steps can help your cash flow without endangering it.