The first step to collecting troublesome accounts -actually, a way to avoid trouble - is to bill effectively. Every invoice you send out should be clearly identifiable as an invoice (write the word "INVOICE" at the top), and should include a unique invoice number that you can refer to, as well as the name of the person who authorized the purchase.
You should clearly indicate the time period covered by the invoice, and the date due. While most clients will be put off if your invoice includes penalties for payments made within 90 days, you'll find that more people pay sooner if you include a small discount for payment within 15 or 30 days, and make that discount stand out on your invoice.
Follow up on Invoices
You'll also find that staying in touch with your customers' accounts-payable people is a tremendous advantage. Even if your late-payers are very small businesses, you'll find that knowing the person that handles payments is a big advantage. Keep the contact with this person steady and friendly. Call after three days to be sure your invoice was received. Call after 30 days if it hasn't been paid, and ask whether there is anything you can do to help speed the process along. And call after 60 days if you still haven't been paid. Businesses short of cash are constantly making decisions about who to pay and who to put off. If you stay in close touch, you're much more likely to be in the "pay them now" group.
Collect What You Bill
One final point, but a very important one: Stick to your guns. As one business consultant explains, "Once you get the reputation for bargaining over overdue debts, you'll never end a year with full payment on all your invoices. My approach since very early on has been that there is something sacred about the money I've billed for. I'll negotiate up-front on fees, and I'll even negotiate over fees for work in progress if I have a client who's having hard times, but I will never, ever reduce the amount owed once the work is done and an invoice has gone out the door. I'll extend terms if I have to, but every dollar must get paid, period. People I work with know I'm serious about this, and they don't even ask anymore. Which is nice, because then I don't have to say 'no' so much. And I get what's owed to me."