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%.

Read more on WSJ.com

Robert Stopanio’s new medical-device manufacturing plant was supposed to open eight months ago and employ about 75 workers in a state that desperately needs jobs. But Stopanio hasn’t been able to find the financing.

While the federal government pours billions of stimulus dollars into the economy and bails out some of the country’s biggest banks, local businesses say they are ready to grow — if only they could get a loan.

“I am a growth mongrel, I love growth. But there is no money. There is no working capital,” said Stopanio, the owner of Scorpion Performance of Fort Lauderdale.

Instead, Scorpion is building its new Ocala plant from the profits it pulls in from its primary business making high-end automotive parts.

“We have to build as we earn,” Stopanio said. With a little luck the new plant will be open by Christmas.

Commercial and industrial lending across the United States fell 8 percent from December through June, according to the Federal Deposit Insurance Corp., and the lending drought has hit small business even harder.

The Small Business Administration, which encourages commercial lending by providing banks with hefty guarantees, said total loan volume was down 70 percent in Miami and 64 percent in Broward County, Fla., during fiscal year 2009, which ended in September.

The agency has been trying to spur lending by providing 90 percent guarantees on some loans, but there’s only so much the government can do, said SBA spokeswoman Hayley Matz.

“We can guarantee the loans, but we need the institutions to make the loans,” she said. The agency has been pushing small community banks to take up the slack and is asking Congress to raise SBA loan limits and allow the agency to back more loans.

President Barack Obama has acknowledged that the recovery is being jeopardized by the credit crunch and has asked Treasury and the SBA to meet with business leaders to craft a solution.

The issue is a prickly one for the administration, which is being tarred for pumping billions into banks even as some of those institutions are turning off the taps.

For years Bank of America was one of South Florida’s largest SBA lenders. And the George W. Bush and Obama administrations have put $45 billion into the institution to prop it up since the financial crisis began.

But during fiscal year 2009, the bank granted only $3 million worth of working capital 7(a) loans in the SBA South Florida District. That’s an 86 percent decline from the previous year. Part of the drop is due to tighter lending standards and the bank’s need to remix its loan portfolio, said bank spokesman Don Vecchiarello. But he also attributed the decline to flagging demand.

“Small businesses are concerned about taking on more debt, and many have decided to control their costs,” Vecchiarello said. “In addition, declining economic conditions have impacted small businesses’ ability to get credit.”

Ken Thomas, a Miami banking analyst, said demand is down but banks are also reluctant to extend loans. “A lot of banks had a lot of problems with past loans and they don’t want to make new loans right now,” he said.

Bank of America isn’t alone in scaling back lending. Of the 133 SBA lenders in South Florida District, 71 cut their 7(a) lending by double-digit percentages in fiscal 2009.

Rafael Cruz, the head of the Small Business Development Center in Broward County, said even solid companies with 10- to 15-year track records are getting denied. “These are companies that are moving, selling stuff, paying bills and need access to a line of credit to get over the hump and start rolling again,” he said. “But it has become impossible for small businesses to get loans.”

Ann Fierro is the chief executive of Fort Lauderdale-based Omega Technology Solutions, which produces software used to audit hospital billing. Just days after Bank of America received its first $25 billion from the federal government, Fierro said the bank froze Omega’s $1 million line of credit. When she started covering operating expenses on her personal credit card, Bank of America canceled her cards and began holding all deposits to the company for 10 working days. Fierro said neither she nor Omega had ever been late on a payment and her customers — all hospitals — had never bounced a check. “It froze us in place,” Fierro said. “We could only do what we could pay for.”

Omega eventually found another bank, but Fierro said the cash crunch has slowed it down and put new product development on hold.

Bank of America said it would not comment on individual cases.

While there are multiple state and federal initiatives to try to jump-start business lending, that’s only part of the equation, said Jim Swift, the chief executive of Cortera, a Boca Raton-based firm that helps business owners assess customer credit risk.

Cortera research has found that small businesses are 25 percent slower in paying their suppliers and other companies than they were a year ago. This gumming up of trade credit, as it’s known, could be a major obstacle to a recovery, Swift said. “We gave all the money to the banks with the hope that they would extend more credit and there is not a lot of evidence they did,” he said. If the government pours money into small businesses and they don’t speed up their trade credit, it would dampen the government’s efforts.

“The whole idea of business lending is to free up money,” Swift said. “You have to get the money flowing.”

Read more on The Network Journal website

In stark contrast to small business conditions – and offering further evidence of the unequal rates of recovery – the data reveals that big businesses are now actually, on average, paying their bills faster than they were in same period two years ago before the recession began.

The Cortera SBI tracks late payments against agreed upon terms, measuring late accounts receivable measured in days beyond terms (Average DBT) for businesses with less than 500 employees, comparing this data with equivalent A/R metrics for large companies (greater than 500 employees) and all businesses.

Read more on The Jacksonville Advantage website

Almost all indicators over the last few months have demonstrated that the economy is pushing toward recovery—albeit, sometimes, quite slowly. Dragging down the emotional outlook, unemployment this month topped 10% for the first time since 1983, though that shouldn’t really have been all too surprising. Predictions have for some time pointed toward a double-digit unemployment rate before the year’s end.

Now, the holidays are no longer on the horizon; they are already here. Seasonal employment is being eyed to save many families, while retailers are bracing themselves for the hopeful return of the U.S. consumer. Holiday advertising began months ago, just after the back-to-school sales ended, and the economy is hoping to see some significant improvements in consumer spending this shopping season.

The holiday season also means it’s a bad time of year for receiving timely payments. Manufacturers, retailers and suppliers typically take on additional trade credit debt as they prepare for the holiday shopping season. This has been clearly evident in Cortera’s Supply Chain Index (SCI), which has seen a spike in late account receivables (A/R) each holiday season every year of the index’s existence. So, it was of little surprise that after four consecutive months of improvements, the SCI saw slow payments in the supply chain tick upward in October.

However, that’s not the entire story.

At first glance, the sharp increase seems indicative of the seasonal days beyond terms (DBT) that Cortera sees every fall and winter as companies dramatically slow down payments to suppliers as they try to manage their capital for the holidays. Unfortunately, this slowdown is normally seen in November or December, and then quickly recedes after the New Year when companies are sitting on a cache of cash and begin paying off debts again. This year, the arrival of the winter spike is two months earlier and the analysts at Cortera are scratching their heads.

Read more on nacm.org

BY JIM WYSS, The Miami Herald

Robert Stopanio’s new medical-device manufacturing plant was supposed to open eight months ago and employ about 75 workers in a state that desperately needs jobs. But Stopanio hasn’t been able to find the financing.

While the federal government pours billions of stimulus dollars into the economy and bails out some of the country’s biggest banks, local businesses say they are ready to grow — if only they could get a loan.

“I am a growth mongrel, I love growth. But there is no money. There is no working capital,” said Stopanio, the owner of Scorpion Performance of Fort Lauderdale.

Instead, Scorpion is building its new Ocala plant from the profits it pulls in from its primary business making high-end automotive parts.

“We have to build as we earn,” Stopanio said. With a little luck the new plant will be open by Christmas.

Commercial and industrial lending across the United States fell 8 percent from December through June, according to the Federal Deposit Insurance Corp., and the lending drought has hit small business even harder.

The Small Business Administration, which encourages commercial lending by providing banks with hefty guarantees, said total loan volume was down 70 percent in Miami-Dade and 64 percent in Broward during fiscal year 2009, which ended in September.

The agency has been trying to spur lending by providing 90 percent guarantees on some loans, but there’s only so much the government can do, said SBA spokeswoman Hayley Matz.

“We can guarantee the loans, but we need the institutions to make the loans,” she said. The agency has been pushing small community banks to take up the slack and is asking Congress to raise SBA loan limits and allow the agency to back more loans.

President Barack Obama has acknowledged that the recovery is being jeopardized by the credit crunch and has asked Treasury and the SBA to meet with business leaders to craft a solution.

The issue is a prickly one for the administration, which is being tarred for pumping billions into banks even as some of those institutions are turning off the taps.

For years Bank of America was one of South Florida’s largest SBA lenders. And the George W. Bush and Obama administrations have put $45 billion into the institution to prop it up since the financial crisis began.

Read more on The Miami Herald website

The SCI is a monthly index of accounts receivable activities covering manufacturers, distributors and wholesalers, retailers, services, and transportation companies. It measures payment activities of approximately 350,000 businesses.

“An abrupt slowing of payments and cash flow throughout the supply chain typically indicates a waning confidence in sales,” says Jim Swift, president and CEO, Cortera. “But we’ve seen similar spikes occur in the past, as supply chain stakeholders make significant upfront investments in preparation for the holiday shopping season. What makes this one potentially puzzling is the timing. We’re either looking at the impact of businesses stretching out such debt over a longer period of time or confidence in the strength of a recovery has dropped over the past month.” The November report, due out the first week of December, will go a long way toward answering these questions, he says.

Read more on SupplyChainBrain.com

Building business credit isn’t just about paying your bills on time. Ideally you want those on-time payments reported to the credit agencies so other vendors and lenders will see your stellar payment history. But if your small business, like many, does business with other smaller firms, it may be difficult to get credit for your good credit. That’s because it’s not always simple to report small numbers of transactions.

Traditionally, if you want to report your customer’s payment histories, you must set up an account with at least one of the business credit reporting agencies, and that in itself is no small task. (I’ve tried.) You’ll go through what can be a lengthy application process, you may have to pay the agency in order to get set up to report, then you have the task of supplying account information each month.

It’s no surprise that most small businesses never bother. That means millions of transactions go unreported.That’s why I am intrigued by Cortera’s new platform that allows firms to rate others. It debuted a few months ago at Demo – you can watch the video from the conference here. It’s easy, and free, to report.

And don’t worry that this is some new start up that will hot this year, gone the next. Cortera is not a newcomer to the business credit world. They have been around for fifteen years and have developed a robust credit reporting platform used by large firms, too.

For this new community to work, business owners need to give as well as get. That means we need to start reporting our payment experience with our customers, as well as asking our vendors to do the same for us. The more information that is shared, the more valuable the database becomes.

While I’d like to focus on the positive whenever possible, there are additional ways to use this service. For example, you can employ the system as a soft collections tool. Let your clients or customers know you will report their payment history, and see if they don’t start moving your invoices up toward the top of the pile.

Read more on AllBusiness.com

Supply chain cash flow has slowed, reversing a four-month trend, according to an October 2009 Supply Chain Index (SCI) report from community-driven business information company Cortera.

The report, a monthly index of accounts receivable (A/R) activities for manufacturers, distributors and wholesalers, retailers, services, and transportation companies, measures payment activities of about 350,000 businesses.

The October SCI report reveals the slowing of payments and related cash flow throughout the overall supply chain, on the heels of four straight months of improving conditions. This could represent an early arrival of a similar seasonal pattern seen over the past couple of years as manufacturers, suppliers and retailers take on additional trade credit related debt in advance of the critical holiday shopping season.

The Cortera SCI tracks late payments against agreed upon terms, measuring late accounts receivable (Late A/R), excessively late accounts receivable (Late A/R >30 days), and overall average days beyond terms (Average DBT).

These results are typical before the holiday season, says Alex Cote, vice president of marketing at Cortera. “But you don’t usually see such a slowdown in payments until the end of October.” The data for this index is through the end of September. “So it appears that we might be looking at an earlier than usual arrival of such seasonal behavior.”

There was a more pronounced spike last year in the data though the end of October (the November 2008 report), Cote says, “and this was compounded by the coinciding financial markets’ meltdown slamming businesses in October 2008.”

The October SCI report for 2007 showed improving conditions based on faster rate of payments between stakeholders, Cote explains. “The November report showed a similar and expected reversal as payments slowed in advance of the holiday season.”

In both cases, he points out, such slowing peaked in December and then fell in January “as income from holiday sales fueled payments through the supply chain and inventory levels returned to nonholiday norms.”

Read more on Multichannel Merchant’s website

Dean Calbreath, The San Diego Union-Tribune

Even before small-business lending giant CIT Group filed for bankruptcy last weekend, entrepreneurs and mom-and-pop shops were having a hard time funding their operations.

So far this year, small-business loans have slid by 3 percent nationwide, or $113 billion, which is the first decline since 1993, according to the most recent data from the Federal Reserve.

With tight credit restrictions and a dwindling supply of lenders, many small-business owners have stripped their personal savings or funded purchases through high-interest credit cards in order to survive.

The downfall of CIT and such regional financiers as San Diego National Bank make it likely that credit will get even tighter. And as the year-end inventory season approaches, in which many businesses have to temporarily borrow to smooth their cash flow, the need for short-term credit will become more dire.

“There’s a lot of panic on Main Street,” said Paul Rauseo, managing director of George S. May International, a management consulting firm in Chicago. “Businesses are wondering how they’re going to fund their inventories in the fourth quarter and how they’re going to meet their cash flow in the first quarter of next year, or further beyond.”

Jim Swift chief executive of Cortera, a credit bureau specializing in small to medium-size businesses, warned that the deepening credit crunch could “handcuff our economic recovery because businesses won’t be buying new inventory, paying suppliers or hiring new employees.”

In San Diego County, small-business lending took a large hit last year. During the six months that ended March 31 — the most up-to-date information on the local Small Business Administration office’s Web site — $77.4 million SBA loans were extended in the county, compared with $164.1 million during the same period a year before.

The reduction in lending is having a ripple effect on businesses throughout the county. Even if businesses do not depend on loans for their operations, they often have clients or suppliers who do.

Read more on the The San Diego Union-Tribune website

Cisco Systems had 29%—far too many—of its sales orders going on credit hold because credit limits were being applied to a specific bill-to address, not the ultimate economic buyer, which may have exhausted its credit under one address but often had plenty of available credit under a different address. The result was delayed orders, grumpy customers and sagging productivity as a result of a lot of manual intervention.

So the credit pros at San Jose, Calif.-based Cisco embarked on a two-stage project to fix the problem. The first step was to modify the ERP system to apply credit orders to the consolidated availability of the parent company, not the bill-to entity. “This allowed us to reduce customer credit limits from over 10,000 to under 2,000,” reports Tom Braida, director of global credit.

The second step was to install an automated, integrated credit review system, eCredit from Cortera. “We were able to enhance our controls by converting from virtually all manual-and-detect type of controls to having exclusively automated-and-prevent type of controls,” says Warren Harber, director of quote-to-cash finance at Cisco.

The new credit system allowed Cisco credit analysts to automatically upload customers’ financials, run bureau reports, upload ratings and credit scores, pull live customer accounts receivable data from the ERP system, route credit reviews for approval and manage by exception, thanks to flexible, rules-based credit decisioning.

Three months after implementation, Cisco had cut unnecessary credit holds by 25%, and after six months, by 43%. Within four weeks, the number of completed credit reviews was up 197%, thanks to improved productivity associated with the eCredit system. So far, Cisco has automated 24% of its completed credit reviews and hopes to reach 35%, Braida reports. Altogether, the project has saved Cisco more than $1 million annually, the cash value of time that is no longer wasted, Braida estimates. “We can now focus on the more challenging credit issues associated with higher risk accounts.”