Here’s a common problem that startup businesses sometimes don’t anticipate and are often unprepared to face: slow-pay or no-pay clients. Late or unpaid invoices are a fact of life for any business, big or small, that doesn’t collect full payment in advance.
If customers are getting slower and slower at paying, and your overdue notices and e-mails aren’t getting much action, it could become a big problem for your startup company cash flow.
But there’s much a small business can do to head off trouble at the pass, or to speed up payments.
The key is to create a clear cash collections process at your startup business. It starts by making smart credit-granting decisions. “But I don’t grant credit,” is a common protest from startup entrepreneurs. Yet anytime you deliver a product or service without first collecting payment you are, in fact, granting credit. If you are ever at risk of not being paid, you are - like it or not - a creditor.