When customers abuse your terms, you should write a personal letter to the owner, majority partner, or president of the company, suggests one veteran credit manager. "The letter should show concern for the customer, and reflect a 'what can we do to help' philosophy."

"You can show the history of the account, outlining the ups, downs, and trends you see. You should emphasize the positive aspects and downplay the negative. Nobody likes to hear criticism.

"You can also express concern that bills are not being paid within your terms and ask why. If it seems the customer won't be able to meet your terms, show that you are willing (for a short period) to stretch your terms in its time of need."

Here is a letter he recently sent to a slow-paying customer:

In reviewing your account, and analyzing your past payment habits for invoices rendered between February and October, we show our invoices are not being paid on a timely basis.

We get concerned when good-paying customers show a slowing trend. I have attached a graph which shows your average days paid for forty (40) invoices was 59 days. What is more alarming is that between February and April, invoices were being paid on an average of 40.2 days. But between May and October, that figure ballooned to 67.9 days.

We are willing to work with customers, but we need your help. As you are one of our most valued customers, we request that you see that none of our invoices go over forty-five (45) days. This will allow us to service your needs, and to continue to give you support now and in the future.

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"The key is diplomacy, tact, and concern," he says. "If a customer finds these things in your letter, it will know you care and will be more willing to work with you to make timely payments."