According to the Kentucky Society of CPAs, the six steps outlined below can help prepare your business for future growth. Establish good credit practices and invoice promptly. Carefully evaluate the creditworthiness of your customers and grant credit only to those who meet your qualifications. Your company s credit policy should also call for establishing credit limits for each customer, sticking to those limits, and periodically reviewing the limits you set. Monitor accounts receivable .
Slow payment has a crippling effect on cash flow, especially for small businesses.
That s why it is important to know who owes the business money, how much is owed, and for how long the amount has been outstanding. Identify and actively pursue slow-paying customers. In most cases, the longer the outstanding debt, the greater the chance you will never get paid. If your own collection efforts fail, turn the process over to an attorney or collection agency. Keep in mind that a customer who does not pay is not a customer.