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201 GREAT IDEAS for Your SMALL BUSINESS, Third Edition by Jane Applegate

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GREAT 50 IDEA: Collect the Money People Owe You

If you can't find or afford a debt arbitrator, you'll just have to do it yourself. When I ask the people at my events if anyone owes them money, way too many hands go up. Unless you are a bank, you should not be financing your customers.

The key to collecting money from customers is to handle it diplomatically and not jeopardize a good business relationship. So, here are some tips:

First, determine exactly how much each customer owes you by reviewing every account. Next, contact the responsible person in writing—not via e-mail. You need to determine whether the client or company has temporarily fallen on hard times, or if they are in serious trouble and have no ability to pay up.

If a good customer ...

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