Even if you’ve cornered the market and your products or services are irresistible, you can fail. One way is to fumble billing and collecting. Unreceived accounts receivable are useless if they remain unreceived.

There’s a price you pay for not getting customers to pay your price. It ranges from obviously declining revenue, to more seriously dwindling profit margins and ultimately to the dreaded cash flow crunch.

There are ways to avoid disaster: contracts, timely billing and strict payment policies.

First, establish clear terms. Otherwise, expect to be paid when your customers get around to it. Thirty-day net is reasonable.

When possible, use explicit written contracts (they resolve disputes, particularly in court). A contract shouldn’t be one-sided. It shouldn’t scare off clients or chase away return customers. Make it clear it’s designed to protect you both.

In your contracts, specify payment dates or intervals. One third of the total may be required to begin, another third at a midpoint and the balance on completion.

Protect yourself from clients who break contracts. An “early termination fee” can require payment of half the outstanding balance. Such a provision rarely discourages clients from signing, since they intend to finish. But it does encourage clients to finish, since they might as well get something for the money they must pay.

Although your clients are responsible for paying their bills, you’re responsible for sending out the invoices. Falter here, and your money comes in later rather than sooner.

Have a regular billing cycle. Monthly cycles are practical for most companies.

In each billing cycle, create invoices and promptly mail, e-mail, fax or otherwise get them into the hands of those who owe you.

Record accounts receivable when received to avoid embarrassing yourself or annoying customers by asking for payments already paid. This also tracks delinquent customers.

To prevent delinquent customers from becoming total deadbeats, follow these rules.

Include outstanding balances on all billings.

If an account is past due, add a diplomatic statement saying so. When more than one billing cycle late, make a friendly telephone call. Take notes. Get a payment commitment. Follow up regularly.

Still unpaid? Send a letter recapping the history and requesting payment.

Still unpaid? Sue, or turn it over to a collection agency, which will take a percentage.