Wouldn't it be nice if every customer paid on time? No follow-up emails, no reminders, no late penalties, no collections agency—just good ol' hassle-free clients who pay their bills. That's not too much to ask for, is it? Well, if you're like most entrepreneurs, then it might be: \t31% of small business owners claim it takes at least 30 days to get paid for a project \t33% of small business owners said their business has at least $20,000 in outstanding receivables \tThe average US small business has $53,999 in outstanding receivables Maybe getting paid on time is too much to ask for? Apparently, almost every business owner has to deal with it—and the impact isn't marginal. When you consider the consequences unpaid invoices have on small businesses across the US, you realize it's nothing to shrug off: \tIf customers paid small businesses all of their invoices, business owners would take home an incremental $31k on average \t23% of small businesses would have cash to hire new employees—extrapolate that, and small businesses in the US could hire an additional 2.1 million employees, reducing US unemployment by 27% As you can see, timely payments from customers would be a game-changer for small businesses. Fortunately, you're not entirely at the whim of your clients when it comes to outstanding receivables. When you've exhausted all your passive-aggressive options, it's time to bring out the doomsday weapon: collections. If you're debating whether it's time to send your customer to collections, you should look for these 5 signs. 1. When your customer's payment is 90-days past due Typically, the protocol is to send a customer to collections when the payment is 90 days late. If you give your clients 30 days to make their payments, that means 120 days since you issued the invoice. That's a lot of time to go unpaid, and this delay can put a real dent in your cash flow. If you decide to shorten this deadline, include this information in the terms you set with the client upfront. Also, before you escalate to collections, make sure you communicate with the client—they may have had an accident or disaster that's impacting their ability to pay (not just negligence). It may be an issue you can settle on your own. 2. When your customer ignores reminders If you've sent the invoice, sent reminders, and sent reminders for the reminders, and you still haven't been paid, it may be time to involve collections. You don't want to hassle your client, nor should you have to waste your time sending follow-up after follow-up. You have much bigger, better things to do. When not even a boatload of reminder emails, texts, and phone calls get the job done, it's time to send your customer to collections. 3. When your customer keeps asking for more time Listen, life is hard—we've all been there. From time to time, clients may ask for a deadline extension. This extension might not be a big deal for you at the moment, so you may let it pass. If this trend continues, however, it's bound to become an escalating issue. There comes a time when enough is enough, and you have to put your foot down. When your customer keeps asking for more and more time to make payments, it's time to send them over to collections. 4. When trust with the customer has been broken Credit payments are all about trust. If no trust existed, you'd just require up-front payment for every service and good you render (which isn't always a bad idea). When a client requests a product or for work to be done, you give them a certain period to pay you back—you trust they'll be honest to their word. If your customer breaks this promise (or other promises), you lose faith that they'll be an ethical client. When this happens, it's time to send them to collections—you don't have time to waste chasing delinquent customers. 5. When your customer vanishes If your point of contact at the business becomes unresponsive, don't panic. Do what you can to contact the business or another member of the team. If you can't get in contact with anyone or your contacts all stop responding, they're likely experiencing a crisis or are intentionally avoiding you. If that's the case, it's time to send them over to collections. Send to Collections with Caution If you're witnessing any of the 5 signs above, a collections agency or accounts receivable financing can get you the money you rightfully deserve. Just know, sending a customer to collections is likely to burn some bridges. This decision could impact their credit and get legal powers involved. That's not to say you shouldn't send a customer to collections—if they're in the wrong, there's no shame about doing so. But be aware that the situation could strain relationships. Do everything you can to get the money you and your business deserve. There's a world of good you can do by collecting on all your unpaid invoices—now, go make it happen.