If commercial collections is not part of your B2B business plan, youre losing money. Get your cash flowing again with these commercial collection secrets.

Commercial Collections: Fixture of the New B2B Culture

If youre in the business-to-business field, or even if youre a consumer products business that works through third-party distribution channels, you probably know what its like to check your mail anxiously each day, sifting through all the bills for that payment that was supposed to have been in months ago.

It wasnt supposed to be like this. If you were a good, honest businessperson who dealt with other good, honest businesspeople, commercial collections wasnt supposed to be part of your vocabulary.

Back in the good old days, an invoice or purchase order that had an established company listed in the bill to field was almost as good as a cashiers check. Nowadays, if youre in the business of serving other businesses you may find that your cash flow is less reliable than a small-time bookies.

Commercial Collections: A Personal Story

This past April I finally got the $2,000 a client owed me for work done in December, after spending almost as much moneys worth of my time reminding them to pay.

No, this wasnt one of those hand-shake dealswe had a 5-page contract specifying net-30 payment terms. Nor was this some guy with a lemonade stand. It was the media division of one of the largest retailers in the United States.

The worst part was, I trusted this client based on my experience working with them a few years before. I actually spent the money on Christmas presents, fully expecting the payment to come in before my credit card statement.

Avoiding Outstanding Invoices

Of course, you can nip this problem in the bud by cultivating strong relationships with clients who pay on time. But those clients are getting few and far betweenand, as I found, the good can go pretty bad pretty fast.

Worse, it seems that the larger the business, the less likely they are to pay on time. Net 10 days might as well be a foreign language in Fortune 500 land. The long-standing advice given to B2B businesses and self-employed people is that the money is in big corporations. But good luck getting it from them before your rent is due.

What I Should Have Done

Looking back on my experience with the deadbeat corporate client, my biggest mistake was doing it all myself, with writing the letters and making the phone calls. With an hourly rate of about $75, I ended up spending the time equivalent of a large chunk of my $2000 fee.

I should have gone to a collection agency. I just didnt know then that were collection agencies that would take on small business debts and run the whole process for you for as little as $20 per debt.

Of course, I also didnt know that going to a collection agency didnt necessarily mean putting an account in collections. Many collection agencies are in fact refashioning themselves as accounts receivable management specialists; theyll even manage your invoicing from end-to-end if you want. The client may not even realizing that the person on the phone is from an outside agency and not your own personal assistant.

When I think of all the value of the time I spent collecting that last $2,000, I could kick myself for not handing it over to a collection agency. But, I can always look forward to putting this knowledge into practice the next time I have a client whos slow in paying.