One of the biggest problems that a small business can have doesn’t occur before or during the act of making a sale. It happens afterwards, when it’s time to collect money owed to the business.

It’s way too common to hear of a small business experiencing cash flow problems because they didn’t chase up their debts from clients as far back as 6 months or a year.

Many small business owners make the mistake of trying to strike a balance between pestering clients about outstanding debts and trying to maintain a good relationship with the client. But the bottom line is that there’s nothing more important that ensuring your business is paid what it is owed.

Collecting debts should not be something you ever feel uncomfortable doing. Anthony Igra of debt collecting firm Contractors Debt Recovery says that if you’re payment is even one day late, then chances are you’re not getting paid unless you take some action. There’s no room for being leniency when it comes to debts because the success of your business could depend upon the income it deserves.

If you find yourself in this situation where a client has seemingly forgotten about paying you, then there is a sequence of steps you should take which will get your business its money. Anthony Igra outlines the following steps as the surest way to retrieving your debts.

Firstly it’s a good idea to send a reminder to the client a few days before the due date of their payment. Many cases of outstanding debts occur when someone has simply forgotten to pay, and are solved easily.

If a debt has not been paid by the due date, do not delay in contacting them and chasing it up. The longer it is left, the bigger the problem becomes and the worse it ends up being for the business relationship. Call the client an ask about the payment.

If you repeatedly can not get in touch with the company or the payment still won’t arrive, then the next step involves getting together all the relevant documents and sending a letter of final demand. You’ll need to include things like invoices, contracts and other documents which can outline that the debt is outstanding.

Make sure you give a specific deadline for payment, such as five days or two weeks. This is important because you don’t want to again be sitting around waiting. Another tip is to send this letter of demand via a courier or fax – and don’t forget the fax transmission report.

If you still have no luck, it’s time to again step up the process to a more serious approach. If the client business is involved in an industry association with codes of conduct, get in touch with them. Take the matter to industry specific tribunals or other dispute resolution pathways. Otherwise you can lodge an official statement of claim in court. The goal here is really to get the case in front of a third party. It’s vital that you have all the documents related to the matter organised and copied.

If you really want to add an extra punch to the matter, you could hire a service agent to personally deliver the notification of legal action. For $100 it’s a rather intimidating approach to ensuring you are never kept waiting for your money again.

The most important thing to remember through this process is that a specific timeline is imperative. Don’t sit around waiting for the cheque that will never come. From day 1 of overdue payment you should be taking action. The sooner you act, the easier it is to avoid non-payment turning into debt recovery.

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