If you are in business you know about dead beats. And it does not matter if you are a dentist, a doctor, an accountant, a shopkeeper, or you mow lawns—you will face problems getting paid. And asking for money may not be your favorite thing. But it is one of those disagreeable chores of being your own boss. Asking is a mindset. Your attitude and determination to get paid will make a difference. If you want your money you will keep a tight rein on your accounts receivable. If you feel fuzzy about pressing people to pay you, some will sense it and exploit you. The right attitude about collecting money is casting aside any feeling that asking for money is not dignified or professional. Lawyers have no problem demanding payment for their clients—so why should you? As the psychologists will tell you, “give yourself permission to ask for your money.” Put aside your phobias and hang-ups and do it! It is your responsibility to your family, employees, investors, and suppliers. Business is built on trust, you trust your customer to pay you, they trust you to do as you promise. If you keep your end of the bargain so should they, and most do. But there will always be a few who delight in beating you for a few bucks. It is the few that will spoil your day and frustrate you spending time chasing them. You will always have a few well intentioned souls who want to pay you but are having their own cash problems. They have difficulty managing money. They borrow, they buy on credit, and they seldom volunteer to pay their bills. They live with phone calls and past due notices. Without asking, you will never see their dollars. Don’t be an easy mark and fall for tales of woe. If you are “too understanding,” you are not helping the customer who may be having a tough time. You are known in psychological circles as an “enabler” as you permit the situation to continue. A cash or credit card business is preferable, but if you extend credit—be cautious. Ask yourself would you loan a hundred dollar bill to a stranger? I doubt it. So don’t give credit without a credit check. You can pick up credit application forms at most office supply stores. Sure it is more paper work, but you will lose less money. As deadbeats will lie, verify the application. With experience you will “sniff” the con artists who prey on the self-employed. It is easy to take a beating. The losses from a few, steal the profits from the many. If your net profit is 5 percent—one customer stiffing you may be equal to the profit of 20 customers—scary huh! Let me prove it to you. Assume you have 20 customers and each spends a thousand dollars with you. The net profit per customer is $50 (5% of $1,000). Your total net profit for all 20 customers is $1,000 (20 customers times $50 profit per customer). If one customer sticks you for a $1,000—get my point? Tackle your potential deadbeat problems with a policy. A set of rules for your business or practice. Write it down. Make sure your office staff is clued in. If you are going to give credit, who are you going to trust? What information do you want? If you don’t get paid in thirty days, it is reminder time. Call; send notes, copies of bills. Don’t let the customer or client think you will forget. It is a simple matter, if your clients have problems paying bills; it is the “nice guy” who does not needle or ask that does not get paid. If after 60 days you are still holding your breath, you will be a fool to do business with that customer unless you get cash and an arrangement on the old debt. Should you use collection agencies or sue? Not at first. You are as capable calling as they are. Why give up as much as one third to collect what is yours. Hiring someone to get your money is a last resort tactic. If you are quick to call you local collection agency, be honest with yourself, you don’t want to call; it is easy to pass the buck. But not good business. Start with financial controls. There are plenty of accounting software packages for the entrepreneur that will give you the tools to manage your account recievables. Your need to know who owes you, how much they owe you and how long have they owed you. And you need a system that will not let you forget that they owe you. All the rest is asking, asking, and asking—until you get paid. It is all part of being in business! Copyright 1999-2002 Paul E Adams Dr. Paul E. Adams is a retired entrepreneur, Professor Emeritus Ramapo College of New Jersey and the author of Fail Proof Your Business: Beat the Odds and be Successful.