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As a small business owner, you probably learned the definition of “delinquent” the first time a customer failed to pay for something on time. After all, cash flow is essential to your well-being, especially in the early days, and delinquent customers can negatively affect your cash flow.

Delinquent debt is money that is owed beyond 30 days by one party (the debtor) to another party (the creditor) for goods or services provided. Generally, debt collection becomes more aggressive as the length of time that the debt remains past due increases.

For businesses, the question is: How do you get these delinquent customers to pay?

1. Be friendly, but tough

It’s easy to feel sorry for customers who have good excuses for not paying. Maybe they just lost their jobs. They have a sick child. Or they were in a terrible accident. There’s no way to know whether any of this is true, but you need to prepare yourself to be firm. You never want the customer to feel as if you are not on his or her side, but you also want to avoid letting that person take advantage of you.

When customers give an excuse, offer some sort of compromise, payment plan or other arrangement to show your willingness to work with them, especially if it’s someone who’s not a repeat offender.

2. Write a letter or send an email

If you don’t want to confront your delinquent customers over the phone or in person, try mailing them letters or sending them emails as a reminder to pay. Avoid being too demanding, and let the customer know he can contact you if there’s an issue.

This reminds the customer who simply forgot to make a payment, and gives the customer who’s hesitant to let you know that if he cannot pay, he can still call.

3. Make sure you have a delinquent account policy in place

If delinquent customers are something you deal with often, and even if you’ve never had one, it’s important to have a good credit and collection policy in writing before you even sell another product or service. This way, customers know what to expect when they don’t pay.

Spell out how your business handles collections, and have new customers read and sign the policy before issuing any new credit.

4. Be sure your invoice is clear

When you send a customer an invoice, be sure it’s clearly marked “invoice” and includes information such as how to pay, your web address or physical address, a description of the products and services purchased, the amount due, purchase and order numbers, and other information pertinent to the sale.

5. Make it easy to pay

Provide your customers with as many payment options as possible. You might be surprised to learn just how many people don’t have checking accounts or credit cards. If you can afford it, allow payments in person, via mail, online and over the phone. Accept credit cards, debit cards and checks, and allow for direct debit from your customers’ accounts.

6. Follow up with frequent communication

It’s easy to let one or two delinquent customers slip. You’re busy, after all. But it’s important to follow up on invoices and other communication.

Send a reminder letter several days before the payment is due to avoid potential delinquency. Send another when a payment is a certain number of days past due. You also can make a reminder phone call. You may even find that some customers really did just forget to make a payment.

7. Cut ties when necessary

Every customer is important to your business, but perhaps you don’t want to work with one who’s continuously causing problems. Customers who are chronically late or never pay, who make no effort to compromise, and who become belligerent when you remind them to pay may not be worth the hassle.

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