do you offer strictly pay-in-advance service only? do you think that this restricts the amount of business you could posisbly get? (but will there be much risk if service is given without payment first?)

(but will there be much risk if service is given without payment first?)

Yes, too much risk! With web hosting I believe the norm is to pay in advance for services (ours is anyway) :D
Clients do pay in advance via cc, paypal funds or whatever the case might be.

Pay in advance or sign a contract with customer first.

Yes, unless you've got an airtight contract, demand pre-payment for everything. Anyone who would ask for credit terms without being willing to sign one is just planning to run out on you anyways.

Yes, way to much risk! It's normal in the hosting industry to pay in advance.

We charge in advance (prepaid service)...

.. but sometimes the customer wants to have a credit. In this case, we will only do it if they're a larger customer, and of course we will require them to sign a full contract.

ok - so here is an interesting one: renewal also = prepaid? Does this mean that non-payment at the start of the new term results in service termination?

ok - so here is an interesting one: renewal also = prepaid? Does this mean that non-payment at the start of the new term results in service termination?
Yes. If customer "renews" but does not pay... then it is no different then a new customer who wants an account but does not pay for it.

Customers who have a package that is due for renewal are given plenty of opportunity to make payment. The first invoice ("your payment is due") is sent 30 days before the due date. Then another reminder at 15 days, and another reminder the day before it is due.

If they don't pay at that point, then the account is considered in payment-due status, and is suspended the day after it is due.

That's exactly right! No payment, no service. The client gets plenty of renewal notices (30 days prior, 15 days prior, the day before, and the due date) and if they don't pay in time, their account gets suspended, the end of the last day.