Past-Dues Piling Up?

As we continue through the month I wanted to drop some solid tips on collecting balances owed to you or your business. I can’t stress enough about investing time/money into your team that manages the credit/collections process. It’s worth it, trust me!

Slow collections are one of the fastest ways to choke your cash flow and for many small business owners, it’s a silent killer. You’ve done the work, sent the invoice, and now… you wait. Weeks pass. Maybe months. Meanwhile, you’re paying your own bills on time, wondering when the money you earned will hit your account.

Here’s the truth: getting paid on time isn’t just about asking nicely. It’s about building a system that makes timely payment the norm, not the exception. If you are struggling to be paid on times, it’s time to recondition your customer base.

Why a Collection System Matters

Collections aren’t just a back-office function. They are a critical part of your financial health. A slow-paying customer can cause you to:

• Miss payroll or vendor payments (incurring more costs)

• Struggle with unexpected cash crunches

• Limit your ability to invest in growth

• Write off hard-earned revenue as bad debt

Veteran-owned businesses in particular face unique challenges balancing growth with tight resources. A strong collections process ensures you have the cash to keep your business mission-ready. Are you a veteran or know one that’s running a business, I want to chat with them!

Proven Industry Practices That Work

Here’s what leading companies do to speed up collections and reduce delinquencies:

• Automated Reminders – Set up friendly, professional reminders that go out before, on, and after the due date. Use your ERP system.

• Clear Communication – Make payment terms crystal clear up front, and ensure your invoices are easy to understand. Your customers should know exactly their limit and terms.

• Consistent Follow-Up – A structured follow-up schedule (days 1, 7, 14, and 30) ensures no account slips through the cracks. You don’t wait for day 31 to ask about being paid.

• Early Intervention – Don’t wait until the account is 90 days past due. The sooner you address delays, the higher your collection rate. It’s proven that waiting until day 90 to push will lower your collection results drastically.

How to Structure Your Approach

Think of collections like a battle plan — you need strategy, timing, and execution.

• Daily – Review your accounts receivable aging report to see which invoices are due soon or overdue. I run agings daily. Cash posted daily.

• Weekly – Send follow-ups and make calls on past-due accounts. Keep detailed notes on all conversations. Structure based on past due dollars and risk.

• Monthly – Review collection trends. Are certain customers always late? Are your payment terms realistic? Adjust as needed and build this into contracts and T/C’s (terms and conditions).

• Annually – Evaluate your processes and update policies. Set new targets for days sales outstanding (DSO) and average days to pay (ADP). More to track, but these are common ones.

Reporting & Internal Communication

Reports aren’t just for accountants. They’re a tool for your entire leadership team.

• Customer Reports – Identify late-paying customers early.

• Aging Analysis – Spot problem trends before they hit your cash flow.

• Team Discussions – Talk openly about high-risk accounts and agree on an action plan. Leaders should be updated at least monthly, with a larger quarterly gathering to discuss issues.

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Your Next Step

If you’re chasing invoices, sending the occasional email, and hoping for the best it’s time to shift to a proven, proactive collections system.

With the right processes, you’ll:

• Reduce bad debt exposure

• Keep cash flow strong

• Spend less time chasing payments and more time growing your business

📩 Want the full breakdown of collection strategies that actually work and my template? Email [email protected] to get your copy today for FREE!

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