Many entrepreneurs put their blood, sweat and tears into their businesses but too often deal with customers that are constantly making delinquent payments. Not only do late payments leave the firm with less money to play around with, they also make it difficult to move forward with other processes such as hiring and expansion. 

"The practice of taking longer to pay essentially sucks available cash out of the small business ecosystem, reducing the ability of small businesses to hire new employees," Jeffrey Leonard, chief executive of investment firm Global Environment Fund, wrote in an email to Inc. magazine.

Entrepreneurs simply can't continue to wait on late payments. It's too difficult to bother customers for payments, which can be a huge waste of time. In order for entrepreneurs to continue to grow their firm, they need to get paid on time. Here are some tips from the magazine for how they can make that happen.

Run a credit check with prospective clients
Entrepreneurs want to get involved with as many customers as possible, but they need to be smart about who they do business with. The magazine said a credit check for a small fee could be a good investment before shipping out any products to a customer. This simple precaution can help entrepreneurs determine if their new clients will be able to make payments on time or have a strong credit history.

"We add

[a] business only when it’s a good fit for the company and we know that it’s going to be profitable for us," Kevin Maloney, CEO and owner of Northeast Express Transportation, told the magazine. "When someone asks for extended terms, it raises a red flag and we know to take a look at their financials."

Only deal with smaller firms
Many entrepreneurs want to jump at the opportunity to fill an order with a larger business, but it may be smart for them to stick with smaller orders for now. Setting limits on orders can help entrepreneurs with cash flow forecasting, while also giving firm owners a greater opportunity to get paid more quickly. Working with smaller companies while first starting out will make it easier for entrepreneurs to fill orders for larger firms down the road, according to the magazine.

"We’ve decided some business is not worth having when they demand too much," Miles Harter, chief executive of Dynamic Recycling.

Ask customers if they will be able to pay on time
Any good business relationship revolves around trust, and if entrepreneurs can believe in members of their client base, they will be able to have several more successful transactions down the road. By simply asking their clients if they can abide by the terms and conditions for payments, entrepreneurs will get a better idea of whether they will be able to get their money on time, the magazine said.

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