The Best Ways to Prevent Overdue Accounts

1. Watch for new customers with a bad credit history. You can´t expect that a company or a person with a history of bouncing checks or paying their bills late will change their ways

when dealing with you. If you must do business with the chronically late, lay down your credit rules early and firmly and start the relationship off slowly. Keep the amount of product or services you offer a company with an iffy credit record to a minimum until they´ve proven themselves worthy. And no matter how much you need the business, never start doing business with another person or company until you have a signed contract clearly stating and agreeing to payment terms.

2. Once you begin doing business with someone, make sure you stamp your invoices with the date that payment is due to you. Don´t rely on the customer to look at the invoice date and add 30 days -- or whatever your payment terms are -- to determine the pay date.

3. Offer discounts for early payment and add interest to late payments. A typical discount is two percent to three percent off the total if the bill is paid within 10 days of the invoice date. The maximum amount of interest that can be charged varies by state.