Debt collection is a messy affair, and it doesn't matter where you sit at the bargaining table. You have everything to lose if you're the one chasing after unpaid dues, though, especially if these compromise your business's solvency. You can always hire debt collectors if you don't want to sue your debtor at court, but there are other ways to nudge your client, supplier, or partner towards the right direction without severing business ties. It's the least you can do to salvage what was left and move on with business as usual.
It pays to be diplomatic, especially if the reason for the delay is hardly the debtor's fault. Deliverables are pending because your supplier's machines are broken, or your client stumbled upon a rough patch and couldn't keep up with the dues. These shouldn't pass off as excuses to delay the payments, but it's up to you to remind the debtor of the dues and wait it out. You should always send a letter of notice fifteen days before the deadline so the other party is aware of responsibilities. You can then escalate your methods if the delay drags on from a couple of days into several weeks. Your discretion determines the tolerable grace period for payment, but you'll have to consider tougher measures when repeated requests fall on deaf ears.
Small claims court is your first option, but there's a limit to the amount you can claim from your debtor. It's a cost-effective solution if you're only owed several thousand dollars' worth of goods, money, or services, since you'll also pay a processing fee for the litigation. You'll save a small fortune on attorney's fees, though, since parties aren't required to bring legal counsel to the hearing. Decisions are often reached by the end of the first session, and resolutions or penalties are final and duly enforced. You're required to know the scope of small claims beforehand, though, so do your due diligences before you go toe-to-toe with your debtor in front of a judge.
You'll have to hire debt collectors if your debtor ignores the court's decision. Debt collection services aren't cheap, but their methods work and guarantee dues are fulfilled in time. Besides, your debt collector will evaluate the success rate of your claim before accepting it; risky claims are best entrusted to a proper court, if you're willing to shoulder the legal fees and the paperwork. Running a business requires diplomacy and patience, so you should always keep your options open and resort to extreme measures only when necessary. Your goal is to recover dues without losing a client or business partner in the process, so you keep your head down and your temper in check.