The term “receivables” is one that quickly becomes familiar to small-business owners. This is money owed to your business. It’s a good thing, since receivables represent sales you have made. But receivables also can become a problem if clients are slow to pay – or worse, if they are not paying at all.

The process of collecting money from customers is a fact of life for many types of small or home-based businesses. But if your receivables are getting out of hand, it might be time to come up with a strategy for improving your collections.

SCORE counselor Diane Heutz of Lewiston, herself a successful small-business owner, notes, “There are several things you can do to prevent slow payments before they become a problem, and also to shake some money loose once invoices have aged. First, make smart credit-granting decisions – whenever you deliver a product or service without first collecting payment you are granting credit.

“And issue those invoices in a timely fashion, making sure they are clear and simple. An invoice should state explicitly, in itemized fashion, what it covers. Make it look clean and professional, and include your company logo. Avoid cute designs as they may only get in the way,” Heutz said.

Here are some specifics: The invoice should look real, not just a piece of paper with “amount due” typed in. And be sure it is clear how the payment check should be made out and where it should be sent. Including a return envelope can help. Also include a phone number and contact name for questions. Small-business accounting programs such as QuickBooks can easily create your invoices. Or a dedicated low-cost software package such as MyInvoices & Estimates from Avanquest can help. Visit www.avanquestusa.com to sample the product.

Mail your invoices quickly and send a reminder immediately if payment is not received by the stated due date. On long-term projects, consider planned progress billings.

If you do need to press the customer for collections, send a customized, personal letter, not a lifeless form letter. Remind the debtor of his or her original promise to pay. And ask for immediate and full payment. By all means, get on the phone. Most businesses wait too long to call, but collection experts say a phone call is 10 times more effective than writing or e-mailing.

To learn more about starting or improving your business, contact SCORE, “Counselors to America’s Small Business.” SCORE is a nonprofit organization of more than 10,500 volunteer business counselors nationwide who provide free, confidential counseling and training workshops. Call L-A SCORE at 782-3708 for additional information and an appointment for counseling.