NO ONE WANTS to be a debt collector. But when the economy sinks and customers aren't paying on time — or at all — it's time to step up your collection efforts.

According to Raleigh, N.C., financial research firm Sageworks, the average length of time that small business owners extended credit to customers or clients climbed slightly to 29 days last month from 28 days during April of 2007. Combined with the on-going credit crisis, in which many business owners are failing to secure or even hold on to loans, a slowdown in a company's cash flow can make it even tougher to keep struggling enterprises afloat.

"If we are having difficulty collecting our receivables, it becomes harder to pay our own bills," says Bill Bartmann, a small business consultant in Tulsa, Okla. In this environment, he adds, "the businesses that have cash will be able to survive longer than those that don't."

To help your business survive, here are eight tips for reeling in wayward accounts:

Get organized

Knowing who owes you, how much they owe you and how long they have to pay it back is crucial. To do so, means getting organized, says Bill Fleming, a managing director of private company services at PricewaterhouseCoopers in Hartford, Conn. Simply tracking client or customer payments via Microsoft's (MSFT) Word or Excel can help. For more sophisticated bookkeeping and invoicing, try Intuit's (INTU) QuickBooks, Quicken or MS Money or, web-based programs, such as Freshbooks or NetBooks.

Offer incentives

Who doesn't want their customers to pay early — and in cash? As the credit crunch forces many business owners to get by with less cash on hand, it's important to avoid extending credit to clients or customers, says Bartmann. To incite them to pay up early, or to pay in cash, offer 2% to 5% discounts, he suggests.

Tack on late fees

Want to get paid on time? Start charging a 5% late fee for payments that are even a single day overdue, says Bartmann. Just keep in mind that tacking on a late fee is a delicate dance, warns Dennis Snow, president of Snow & Associates, a customer service consulting firm in Orlando, Fla. While you want to deter people from paying late, you don't want rub customers the wrong way. To avoid doing so, make sure they understand all fees and penalties before you do business.

Know who you're dealing with

To avoid getting stiffed, check out references or conduct a credit check on customers who place large orders, says Fleming. For prospective customers who don't make the grade, Fleming suggests asking for a deposit before providing any products or services. Keep in mind that some customers might chafe at paying a deposit or having their credit record dipped into, so use this strategy sparingly.

Set clear terms

Setting clear credit terms from the very beginning will help stave off confusion and possibly late payments, says Bartmann. In the customer contract, include the length of time that you're willing to extend credit and how you'd like to receive payment. Also, include any incentives for early payment or late payment penalties.

Invoice properly

Make it easy for customers to pay you. Enabling them to pay online via eBay's (EBAY) PayPal or by credit card may compel people to pay more quickly. Also, avoid confusing language in your invoices and try not to anger anyone, says Fleming. Sending out invoices too early can be off-putting, especially if you haven't done any work yet, he adds.

Send reminders

Send a letter or email to the customer at least five days before the payment is due, suggests Snow. If they haven't paid by the due date, pick up the phone. Business owners often shy away from calling customers for fear of embarrassing them or evoking their ire. But if the customer is long overdue on a payment, it's necessary to reach out to them. Just remember, there's fine line between being firm and being offensive. "If you go at it heavy handed, you are going to add stress to the situation," says Snow. "You'll also increase the likelihood that they will never pick up the phone again when you call."

Call in the debt collectors

If all else fails, call in the real debt collectors. According to Snow, many collections agencies will buy your receivables for around 30 or 40 cents on the dollar. These firms aren't exactly known for their customer service skills, so calling these outfits may be a relationship buster, he says. "You need to exhaust your other avenues first," says Snow.

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