The money you have already earned and not yet collected is usually the largest pile of cash a trade shop can reach without selling anything new. A shop billing five million a year with 45 days of receivables outstanding is carrying over six hundred thousand dollars of finished work in other people's bank accounts. Collections is how you bring it home, and it does not require software that sends reminders for you. It requires three things done every week by a person: an honest aging, a ranking of who to contact, and a written record of every contact and every promise.
Age the money honestly
Aging is sorting what you are owed by how late it is. Most shops run an aging report; fewer run an honest one. Two habits corrupt the report.
The first is mixing money that is not yet due with money that is slightly late. A bucket labeled "current, 0 to 30" blends an invoice sent yesterday with an invoice a month past its due date, and those two need entirely different treatment. Keep five buckets: not yet due, 1 to 30 days past due, 31 to 60, 61 to 90, and over 90. Age from the due date, never from the invoice date, because an invoice on net 30 terms is not late on day 10.
The second is invoices with no due date at all. An invoice without a due date can never become past due, which means it can never look urgent, which means it quietly becomes the oldest money you are owed. Give every invoice real terms and a real due date before it goes out.
One check keeps the whole report honest: the buckets must add up to total outstanding receivables. If they do not, something is being hidden, usually the undated invoices.
Rank who to call
With an honest aging in hand, the question is who to contact first. Resist the urge to build a clever scoring formula. A simple, stated rule works and can be explained to anyone who picks up the list: oldest past due first, then largest balance. The account whose money has been late the longest is at the greatest risk of never arriving, and among equally late accounts, the bigger balance matters more.
Rank accounts, not invoices. You call a customer once about everything they owe, not four times about four invoices. Pull every open invoice for the account into one conversation, and know the total before you dial.
Make the contact and log it
The contact itself is usually short. State the facts without apology: which invoices, what amounts, how far past due, and the question of when payment will arrive. Most late payment is not refusal; it is your invoice sitting unprioritized in someone's payables stack, and a polite, specific contact moves it up.
Then log it. Date, channel, who you reached, what was said, and what is supposed to happen next. One line is enough. The log matters more than it looks:
- Memory fails. Six accounts and three weeks later, nobody remembers who said what.
- Anyone can pick up the list. If the office manager is out, the next person sees the whole history instead of starting cold.
- Consistency reads as competence. A customer who hears "we spoke on the 12th and you expected to pay by the 20th" pays more attention than one who hears a vague first-time nudge every month.
- If an account ever becomes a formal dispute, the contact log is your record.
Promises are a date and an amount
When a customer says they will pay, pin it to a date and an amount and write both down. "Soon" and "next check run" are not promises; "$18,400 by Friday the 24th" is. Read the specific figure back to them before the call ends.
A recorded promise does two jobs. While it is open, it tells you to leave the account alone; hounding a customer who has committed to a date burns goodwill for nothing. And when the date passes without payment, the account changes category. A broken promise is real information: the next contact happens promptly, references the specific commitment, and asks what changed. Shorten the recontact window for that account, and treat a second broken promise as a reason to escalate rather than a reason to extend.
Keep a cadence
Decide a recontact window and hold it. Seven days is a reasonable default: if an account was contacted inside the window and made no promise, wait; once the window passes, contact again. The cadence is what turns collections from a mood into a system. The list gets worked on the same day every week, top of the ranking down, and every touched account gets a log line.
When to escalate
Somewhere around 60 days past due, routine follow-up stops being the right tool, because the delay is no longer about payables timing. Something is wrong: a dispute nobody surfaced, a customer with a cash problem, or a customer who has decided you are safe to pay last.
Escalation is a ladder, and each rung is a decision, not an automatic step. An owner-to-owner call changes the register of the conversation. A pause on new work for the account makes the cost of nonpayment concrete. A payment plan, with dates and amounts written down like any other promise, salvages a strained account. And for construction work, know your lien and bond rights before you need them: the deadlines are set by statute, vary by state, and run from dates on the job, so a conversation with a construction attorney belongs early, not after a deadline has quietly passed. Nothing in this guide is legal advice.
Two things not to do. Never threaten a step you will not take, because the account will remember. And never let your largest customer age silently because the relationship feels delicate; the size of the balance is the reason to call, not the reason to wait.