The Wall Street Journal
By RAYMUND FLANDEZ

If you’re having a tough time getting customers to pay, you’re certainly not alone.

As a result of the roiling economy, many business owners are dealing with foot-dragging clients who are now late and requesting payment extensions on bills. That’s made it difficult for entrepreneurs to get a handle on cash-flow and budget projections. According to the latest American Express OPEN Small Business Monitor, some 60% of business owners are experiencing cash-flow issues and 26% are now worried about paying their own bills on time.

You can certainly hire collection agencies or attorneys to pursue and settle accounts for you. But there are also tools that can help you get a firmer grasp on your situation, before it gets out of control.

Here are three best ways to make sure customers pay.

1. Figure out your customers’ payment history. Do your due diligence in the first place so you don’t need to lament the loss. Before she takes on a new client, Terri Olson, vice president of accounting for OE Construction Corp., does some research on credit-reporting agency Cortera’s Credit Exchange Web site. Her Arvada, Colo., company does subcontracting work for general contractors. For $3 per report, she can find out if the contractors pay on time or if not, whether payments are late by 30, 60 or 90 days. Also, she can get detailed information on the owner, the person in charge of finances and the volume of work they do. Before, she’d have to do the investigating herself, cold-calling other subcontractors that have worked with the primary contractor. “It gave me hope that there’s a way for me to have more control of whom we do business with, and how we do business with other companies,” Ms. Olson says. Other credit-reporting bureaus such as Dun & Bradstreet Inc. and PayNet Inc. offer solvency and delinquency reports to help you figure out the credit risk your business customers may pose.

2. Make it easy for them to pay.SelectShops.com, an online retailer for home décor products, provides a variety of online payment services — Google Checkout, Bill Me Later and PayPal – for customers to use. The fees of such services vary. For example, PayPal offers a flat percentage fee based on volume, ranging from 1.9% to 2.9% of the sale price, plus 30 cents per transaction. Al Silverberg, SelectShops.com chief executive, says having those options prominently displayed on the company’s Web site appeals to consumers, who can choose the option they like best or use the most. “We offer such a variety because we want to make sure … they have an enjoyable worry-free shopping process, including payment,” he says.

3. Try mobile devices. A solution to collecting may just be right at your fingertips. That’s how Pat Jackson, of Jackson Comfort Heating and Cooling Systems Inc. in Northfield, Ohio, sees it. Since May, the sales and marketing manager has supplied her 22 field workers with cellphones and Bluetooth devices that allow credit cards to be swiped or for their credit-card numbers to be punched in manually, at the customer’s home. That’s useful during home emergencies, such as when a furnace or water heater breaks down, and clients don’t have cash. She uses Intuit’s GoPayment mobile and online application, which costs $20 a month, with a set-up fee of $60. Per transaction fee ranges from 1.64% to 3.54%.

Ms. Jackson finds the current collection system much easier and faster than before. Her field workers used to write down credit-card numbers on paper, and she processed them once they got back to the office. Getting paid for a job took longer though because some workers only stopped by once a week to drop off invoices. It was labor-intensive and time-consuming work. The GoPayment device gets payments into her account in one or two days.

“It’s one of the best things we’ve done by far,” Ms. Jackson says. “It’s speeded up our cash-flow deposits.” Not to mention, “customers are impressed, which is great,” she adds.