The longer you wait, the less likely you are to collect. You have to be stern with delinquent accounts and call in a collections agency once they are 90 days past due.

The Commercial Collection Agency Association (CCAA) has an online directory of certified collections agencies. Collection agencies charge from 20 to 45 percent, depending on how much they collect and how old the accounts are.

As others have stated, the longer you wait to collect, the more difficult it can become. That said, there are a number of steps I'd recommend before calling in a collection agency.

First, for these delinquent accounts, call your contact person at the various companies and politely ask if they received your invoice. If they did get the invoice, ask if they've received the product (if you sell something shippable) and if the product orr service you supplied was satisfactory. If they didn't get the product or there was a problem with it or with a service, work with the customer to resolve the issue.

If the product or service was successfully delivered, ask if the invoice has been sent to the accounts payable person to pay. If the answer is yes, ask for the name of the accounts payable contact (write it down) and also ask to be transferred to that person so you can check on the status of your payment.

When you get that person on the phone, explain politely again that you haven't yet received payment (have the invoice number and purchase order number if there was one at hand), and ask when it will be paid. Write down the date of your call and when the individual says they expect to pay the invoice and keep the information with your receivables file for the customer.

All of the above should be done very politely and calmly. The reason is that there can be any number of problems that are holding up your payment. An invoice could really be misplaced (or wound up on the bottom of an unorganized person's inbox); a shipment may not have been delivered, or might have been delivered to the wrong compay (and signed for! ); Accounts payable may need more info - like a W-9 form from you before they can pay; etc.,etc. etc. Being polite and friendly (while still letting the company know payment is late) usually unravels whatever is stalling payment without alienating the customer and without you losing a big chunk of what's owed you to the collection agency.

If you call and get promised a payment and it doesn't arrive within a few days of when you should get it, call again. Remind them of the previous conversation and ask again when the check will be mailed to you.

Source: http://www.businessknowhow....