Do you know what’s one of the hardest parts about running a business?

Sales? Talent? Strategy?

Those are all important of course. But the big thing, which surprisingly no one talks about, is accounts receivable.

It’s make or break. You could be the smartest business strategist or accountant in the world, but if you can’t actually collect the money, it doesn’t matter.

A friend reminded me about that challenge this week, not that we here at El Paso Inc. need any reminding.

My friend is a vendor to what should have been a large, strong company in health care. It’s the kind of client that we would have considered low risk. But this client is headed for bankruptcy, and my friend never got paid for goods and services provided.

In El Paso, we probably do more business on a handshake than we should. It can be such a challenge just to make the sale. You feel that if you’re too aggressive about payment upfront, you’ll turn off the client and they’ll walk away.

But how much credit can a small business extend and how do you manage cash flow?

We’ve learned lessons the hard way. That was the reason we lost a former real estate publication, Homes & Land. Many of our clients were hit hard by the recession and couldn’t pay for the ads they booked.

The magazine was a franchise, and part of the deal was we had to print it with the out-of-town franchiser. The franchiser demanded payment in full before they would ship the magazine out to us.

Today, we warn our sales reps that if clients don’t pay, no commissions.

Some have thought that’s unfair; others didn’t get it. We explain that the percentage of $0 is $0. It’s not a real sale until the money comes in.

Right now, many media and marketing companies don’t invoice until after service is provided. This is sort of like the fancy restaurant model where you order and eat before the bill arrives.

It would be safer and easier for everyone if we moved to the “pay at order, then get your food” model. How much time is wasted in accounts receivable and accounts payable for both parties?

But changing a system and mindset is tough.

There are some things everyone should do:

Conduct credit checks. Got a risky prospect? Then get the cash upfront. Set limits, too, meaning don’t let a client run up big balances. Work with them to pay them down before it’s out of reach.

Then, know when to send in the dogs, but realize you might never do business together again. You can hire an attorney or a debt collector, or take them to small claims court yourself. You can report to the BBB, participate with the credit bureaus or Texas Attorney General. We should all do that to help combat repeat offenders.

And maybe as a last resort, plan out your revenge.

A friend joked that if El Paso Inc. ever went under because of unpaid bills, we should publish the list of deadbeats as our final farewell.

Hopefully, that will never happen!