Collecting Invoices from the Big Boys

Author : Art Gib

Invoices that go unpaid are a detriment to the small business owner When a new business opens its doors to eagerly welcome new customers the owner may enjoy a few sales and think that things may be going so well that they can begin to extend credit to their customers This is not wrongful thinking as business may indeed start booming and the business owner may receive an influx of new business, however caution should be taken when extending credit, especially to larger well established customers

For companies that have been around for over five years the temptation to put off payment is great, after all if a larger business can stall a payment for 30 to 60 days they are the ones benefiting from any interest that may be accrued on the bank account They also appear to have a greater bottom line if they show the accounts payable as having money in the bank

All too often the larger company wields more financial power than the small business owner who is at the mercy of the large company to receive payment when it is convenient The larger company may also issue checks for payable accounts once a month as they employ an accounting staff to handle the receivables and payables

Finding that it is policy for a larger company to wait up to 90 days to pay an invoice the small business owner may consider turning to a lawyer for business collection helps, but the lawyers may also hold out on collecting a debt by sending first and second letters to the company with little effect, all the time billing the small business owner for their time

This is just one scenario where the small business owner may run into problems collecting a debt, but there are others Often business is conducted through networking with other business owners and the small business owner may find himself caught in a dilemma of helping out a fellow businessman by extending credit terms for goods or services rendered that the friend has no way of paying until the money they are owned by a third party is collected

This snowball effect of borrowing from Peter to pay Paul may continue until finally one of the two business owners forgets the debt completely or the business fails due to a lack of positive cash flow

There is a time when, unfortunately and through no fault to anyone, a small business collection agency should be called in to resolve the outstanding invoices and set the small business back on track

Smart Collect (http://www.scollect.com) is a small business collection agency that provides business collection helps for small business owners. Art Gib is a freelance writer.

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