BY JANE APPLEGATE

“The check is in the mail” has become a big joke for many business owners waiting patiently to be paid by clients and customers.

In recent months, more entrepreneurs are complaining to me that, despite a roaring economy, their biggest clients are paying slower and slower.

Examples I’ve collected in the past few weeks include a major northern Florida transportation company quietly slowing payments to vendors from 30 to 60 or 90 days, throwing small vendors into a spin; a television network changing its payment policy from 30 to 60 days without notifying vendors; and a giant Texas computer company outsourcing its entire accounts payable department, further isolating itself from upset creditors.

“Most of my bookkeeper’s time is trying to get us paid,” said the owner of a small Florida-based market research firm, whose largest high-tech client owes him $500,000. “You get a different story from everyone you speak to. Most of the time, you have to start the payment process over and over again.”

He asked that his name not be used because he’s hoping to be paid in full and keep working for the client, despite the aggravation.

“I add 2 percent to 3 percent interest if an invoice isn’t paid in 30 days, but it’s a joke,” he said. “My client just says, ‘Make it due in 45 days.’ ”

He recently had to sell personal stock to raise $50,000 to meet the payroll and office expenses. His problem is that in order to do the work, he has to pay people up front to review and comment on new computer products and services. He not only pays the participants, but must also pay for the meeting space, the videotaping equipment and travel expenses for his staff, all before his client has paid him a penny.

“Our goal for this market research is to figure out what combination of features would maximize the success of the product in the marketplace,” said the owner, who founded his firm in 1983.

Worst of all, his deadbeat client relies on an outside firm to process all payments.

“That company shut downs and doesn’t accept e-mail or voicemail several times a week because things are such a mess,” said the Florida business owner. “It’s so insane.”

While most professional consultants refuse to begin work until they receive a partial deposit, he claims he can’t because his competitors don’t. “If we asked for a deposit, we’d have no business,” he contends.

The question is, why should a business with eight people be paying the expenses for a multibillion-dollar computer maker?

Rather than getting upset, credit and collections expert Eric Shaw suggests taking strong action against deadbeat clients no matter how big they are. “Have the manager of your bank call your creditors and their bankers to find out what’s going on,” suggests Shaw, president of New York Credit in Marina del Rey.

Shaw, whose motto is “If you give good credit, collections will follow,” also recommends putting every request for a late payment in writing. Send the letters via an overnight delivery service, or use something with a return receipt from the Postal Service. You want to document all your efforts in case you do end up in court.

“Tell them, ‘We must have this amount by such and such date, or the work will not be completed,’ ” advises Shaw.

Rather than suing big clients, he recommends filing what’s called a “writ of attachment” against their corporate bank account. When you do get checks, be sure to copy them before depositing them. Look on the front of a previous check to find out the name and branch of your client’s bank. You can also order a Dun & Bradstreet credit report, which usually includes a company’s bank information.

“Suing a client can take years,” Shaw said. “Instead, for about $2,000, you can hire a lawyer to get a writ of attachment within 60 days. It will bring the company back to the bargaining table.”

This tip and others are in Shaw’s book, “The Game of Credit: Managing Your Receivables for Profit,” which is available through Amazon.com.

If attaching your client’s bank account seems extreme, try some preventative medicine by buying credit insurance. The biggest issuer is Baltimore-based American Credit Indemnity Co., but there are others. The insurance premium costs about 1 percent of the sales you want to insure, according to Shaw.

“It’s very cheap, but your receivables must be less than 30 days to apply for it,” he said, adding that the best thing about credit insurance is that the insurer pays you within 60 days, then it’s their job to collect from your creditors.

Shaw has another great tip: Make your bank the beneficiary of the credit insurance policy. Then, ask your banker for a lower interest rate on your commercial credit line or loan. “The one (interest) point you save pays for the credit insurance policy,” Shaw said.

All types of business owners are being squeezed by clients. Carla Ceasar, president of Manhattan-based Egg Entertainment, faced a cash-flow dilemma recently when one of her largest clients quietly changed its payment schedule from 30 to 60 days. At the time, they owed Egg Entertainment close to $10,000.

“Initially, you are so excited because a big client is using your services,” said Ceasar, a former television producer for Bloomberg Television. “Eventually, it turns sour when you realize that you are not getting paid promptly.”

When no check arrived on the usual payment date, Ceasar called her contact to inquire.

“I was given four different numbers to call. No one had any answers as to why we weren’t paid,” recalled Ceasar. “Finally, an executive in New York called someone in another state who told him the payment policy had changed from 30 to 60 days without any notice.”

This unilateral change created a major headache for her small production company. Like most freelance producers, Ceasar is expected to pay her own travel expenses, plus pay anyone she hires to help her produce segments, including camera operators, makeup artists and videotape editors.

“Seven thousand dollars may seem like small potatoes to a big firm, but it means a lot to me,” said Ceasar, who declined to name her client because she wants to maintain the working relationship.

“As a small-business owner, you are held hostage by the payment policy,” she said. “But honesty is the best policy. If your clients are clear about their billing and payment policies, it helps. If they keep you in the dark, so they can hang on to the money, it creates bad blood, and that’s not healthy financially or professionally.”

Free business assessments

There’s still time to apply for a free business or strategic plan review. Jane Applegate and MBAfreeagents.com are offering three free, in-depth “Expert Assessments” to celebrate National Small Business Week (May 23-30).

Simply tell us in 250 words or less why you need the help, your name, business name, number of employees and telephone number. E-mail it to: [email protected], or fax to (914) 738-6339. You can also mail it to P.O. Box 768, Pelham, N.Y. 10803. The deadline is June 15, 1999. Winners will be announced in this column.

Jane Applegate is a syndicated columnist and author of “201 Great Ideas for Your Small Business.” For more resources, visit [email protected].