A client’s invoice is more than two months overdue. You’ve spent countless hours gently trying to coax payment out of them and have offered payment plans and incentives to move the process along. But no matter what you do, getting this particular client to pay your for your goods and services is like pulling teeth.

These type of problems can be avoided by doing some investigative work ahead of time. When dealing with new clients or new vendors for your business, it’s a good idea to check references, payment histories and credit scores.

Of course, just because a company has a low credit rating, or a negative reference, doesn’t mean you should reject their business, but you may want to offer different terms. For example, have high-risk clients pay up front, or make frequent installment payments before your provide your products or services to them.

Another smart move—diversify your customer base across a variety of industries to ensure that market forces don’t create a financial windfall for you and your business. As evidenced by the dot.com explosion of the late 90s, booming industries can go bust virtually overnight, so consider culling clients from both emerging and established industries.

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