Strategies for Reducing Client Payment Delays

Nobody talks about the unglamorous part of running an agency. The part where you deliver amazing work. Ship on time. Client loves it. Then wait 45 days to get paid. Meanwhile, payroll hits in 3 days. Cash is king. Everything else is fantasy. Here's what 18 months of running Jams taught me about staying alive: Invoice the same day. Always. Not tomorrow. Not "when I have time." The. Same. Day. Last month I delayed an invoice by 2 days. "It's just 2 days," I thought. Client went on vacation. Finance was backed up. That 2-day delay became a 3-week delay. Almost missed payroll because of "just 2 days." Follow up like your life depends on it. Because it does. My follow-up sequence: Day 1: Send invoice Day 7: Friendly reminder Day 14: WhatsApp message Day 21: Phone call Day 30: Less friendly reminder Feels aggressive? Your team can't eat "good relationships." The 3-client rule If losing one client kills your business, you don't have a business. You have a freelance gig. We learned this the hard way last year. One client = 60% of revenue. They delayed payment by 2 months. Nearly killed us. Now: No client over 35% of revenue. Takes discipline to say no to big contracts. Takes bankruptcy to learn why. Cash flow > Growth I turned down a huge project once. Payment terms: 90 days. Can't pay salaries with future money. Can't run servers on promises. Took a smaller project instead. 50% upfront. Less glamorous. Still in business. The uncomfortable truth: You're not a visionary CEO. You're a collections agent who codes. You're not building the future. You're making sure there is one. Every founder thinks they're above this. "I'll hire someone to handle that." Sure. With what money? The reality of service businesses: Monday: Ship incredible product Tuesday: Chase last month's invoice Wednesday: Negotiate payment plans Thursday: Ship more work Friday: Pray the bank transfer arrives It's not sexy. It's not fun. It's survival. But here's what nobody tells you: The discipline of cash flow management? It makes you a better business. Forces you to pick better clients. Makes you negotiate harder. Teaches you the value of every dollar. When cash is tight, you can't hide behind: Fancy offices Bloated teams Vanity metrics You're forced to focus on what matters: Value delivered. Money collected. Team paid. Still here after 18 months. Besides a few other reasons, it's also because we collect our invoices. Happy Saturday from someone who checks bank balances more than Instagram 💸 PS: last Monday was world dog day, and I found this awesome pic of me and Zamba enjoying life outdoors at Patagonia.

Collecting money is a pain in the a**. I’ve tried every fancy debt collection system. Nothing works as well as this painfully simple strategy: 𝟭. 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹𝗶𝘇𝗲𝗱 𝗥𝗲𝗺𝗶𝗻𝗱𝗲𝗿 𝗦𝘆𝘀𝘁𝗲𝗺 Don't let automated messages do the talking. Personalize your reminders with a friendly, human touch. A simple, personalized email or call can make a world of difference in getting those overdue payments settled. 𝟮. 𝗜𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲-𝗕𝗮𝘀𝗲𝗱 𝗥𝗲𝗽𝗮𝘆𝗺𝗲𝗻𝘁 Motivate your clients to pay on time by offering small discounts or benefits for prompt repayments. It's a win-win; they save a bit, and you get your dues faster. 𝟯. 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝘁 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗣𝗿𝗼𝘁𝗼𝗰𝗼𝗹 Clear, consistent communication is key. Establish a protocol for transparent communication about debts — it reduces the risk of misunderstandings. Ensure your clients know exactly what they owe and why. 𝟰. 𝗖𝘂𝘀𝘁𝗼𝗺𝗶𝘇𝗲𝗱 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗣𝗹𝗮𝗻𝘀 One size doesn't fit all in debt repayment. Tailor payment plans to individual client circumstances. This flexibility often increases the likelihood of repayment and ensures you meet the needs of all clients. 𝟱. 𝗥𝗲𝗮𝗹-𝗧𝗶𝗺𝗲 𝗗𝗲𝗯𝘁 𝗧𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝗗𝗮𝘀𝗵𝗯𝗼𝗮𝗿𝗱 Use a simple, user-friendly interface where both parties can monitor outstanding debts. It ensures everyone's on the same page and provides an easy way to keep track. 𝟲. 𝗙𝗿𝗲𝗾𝘂𝗲𝗻𝘁 𝗨𝗽𝗱𝗮𝘁𝗲𝘀 In the most non-intrusive way possible, keep clients informed about their debt status with regular updates. These reminders keep the debt on their radar, but it's your job to ensure they're not overbearing. 𝟳. 𝗘𝗺𝗽𝗮𝘁𝗵𝘆 𝗧𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗙𝗼𝗿 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗦𝘁𝗮𝗳𝗳 Nobody likes being pestered about their debt. Handling it too aggressively can leave a bad taste in the client's mouth. Train your staff to focus on empathy and understanding. This equips them to preserve client relationships even in tough financial situations. Debt collection doesn't have to be complex or aggressive. This simple strategy has been a game-changer for me. Use it and get that bag!

Stop sending "Quick reminder on that invoice" emails forever. Here's how we tie in an automated system for some of our clients: - Connect Xero to Stripe natively or connect Quickbooks to Acodei - Set up recurring invoice templates - Enable auto-pay options for clients - Automate payment matching in your books Results from one agency client: - Reduced payment delays by 84% - Saved 12 hours per month on invoice admin - Improved cash flow prediction accuracy to 94% - Zero additional dollars spent hiring collection agenices Offering auto-pay doesn't just help you - it helps your clients too. I find that MOST clients happily chose auto-pay when given the option because: - No manual processing each month - Simpler expense tracking - Better budgeting on their end But here's what most miss: Don't just automate the invoices. Automate the ENTIRE system: - Payment reminders - Receipt generation - Bookkeeping entries - Revenue recognition - Tax documentation Your time is worth more than chasing payments.

You think you’re profitable…  But your bank account tells a different story. Managing cash flow can feel like a constant puzzle. Late client payments strain your resources, while vendor bills pile up, adding to the pressure. As a result, your business decisions slow down, and growth opportunities slip away. The constant worry about cash impacts your leadership, while delayed supplier payments damage relationships and late fees continue to eat into your profits. But you don’t need to worry more! You can fix this and master your cash flow. By two strategies: 1. Accounts Receivable Strategy: - Send invoices immediately after service - Offer early payment discounts - Set clear payment terms - Follow up consistently - Use digital payment options 2. Accounts Payable Management: - Negotiate favourable payment terms - Track due dates systematically - Take advantage of early payment discounts - Maintain vendor relationships - Plan payment schedules Think of accounts receivable as your accelerator and accounts payable as your brake. Balance them well, and your business runs smoothly. You'll transform from constantly checking bank balances to confidently making business decisions. #accountsreceivable  #accountspayable  #finance  

Monday Momentum: Strategy #23 for a Successful Exit – Maximizing Fee Income Revenue isn’t just about what you earn—it’s about how you price, collect, and protect that income. Whether you run a consulting firm, a retail business, or a service-based company, optimizing your fee structure and cash collection ensures profitability, stability, and long-term value. Tip 57: Link Fees to Client Benefits Tie pricing to measurable outcomes. In professional services, this could mean linking fees to ROI-driven results. In non-professional services, such as a fitness studio, it could mean offering premium memberships with milestone-based perks. Clients pay more when they see clear value. Tip 58: Get Tough on Late Payments Implement strict payment terms. For B2B businesses, this means enforcing contract deadlines and using legal measures when needed. In retail or hospitality, it could mean requiring deposits or full payments upfront for high-demand bookings. Cash flow protection is key. Tip 59: Use Bonuses to Motivate Cash Collection Tie staff incentives to revenue collection. A law firm might link partner bonuses to on-time client payments, while a construction company could reward project managers based on milestone-based collections. The faster the cash flow, the healthier the business. Example: A home renovation business struggled with late client payments, delaying projects. They introduced milestone-based payments (deposit, mid-project, final installment) and offered a 5% early payment discount. Simultaneously, they tied site managers' bonuses to on-time collections, creating urgency. The result? Faster payments, smoother operations, and a stronger balance sheet—making the business more attractive to buyers. The takeaway: Smart pricing and firm collection policies improve cash flow and increase your business’s market value. Whether you sell services, products, or experiences, master these principles and boost your exit potential. Are you pricing and collecting strategically? #MondayMomentum #ExitStrategy #RevenueGrowth #CashFlow #SmartPricing #Club33 #Entrepreneurship #Leadership

How are you covering the cost of negative cash flow? You regularly produce a 13-week cash flow forecast and see that your company will be short of cash in that time. The response is to either delay payments, risking the relationships with your own providers, or borrow to make the payments on time. The borrowing costs directly reduce your bottom line. I completed a study of 12 clients' costs of negative cash flow before we started working together. The results were pretty bad: they would spend as much as 15% on borrowing costs in order to cover negative cash flow. What's even worse is that these amounts were incurred here and there, so it wasn't until later that the total financial hit was understood. 9 of the 12 firms* I analyzed took 2 steps immediately. These will work for your company as well. 1)  Stopped hourly billing for all new clients. We worked on the first iteration of IMPACT Based Pricing so they could immediately begin pricing the options they gave new clients. Pricing is both art and science. The first step was to calculate the minimum fee or price for any project or option. We know that the firms will get better at IBP the more they do it. So there was no waiting until it was perfected. Included in the IBP offers were T&C that read “payment in full is due at time of purchase.” If a firm offers annual plans, they will automate monthly payments at time of purchase and made clear that if the payments did not continue the work would stop. 2)  Focus on collecting all outstanding receivables as quickly as possible. Each of these companies has excellent relationships with their clients, so they felt comfortable asking for payment as soon as possible given the T&C that were  originally agreed upon. They used this as an opportunity to thank the client for their trust and business and advise them of the change from hourly billing to IBP in the future. *In this group of 12 were the following: 3 law firms (business, estate planning, employment law). 2 SMEs that provide their expertise as consultants. 5 fractional CXOs (marketing, finance, operations, HR, accounting) 2 digital design firms for business clients. Negative cash flow is entirely the fault the of selling company. And it's totally within your power to eliminate it forever.

In Q4, This Is What You’ll Wish You Had Done Now Every law firm knows the story: Q4 hits, and suddenly the pressure is on to collect. Finance teams scramble. Partners hustle. Emails fly. Calls are made. All in the name of year-end collections. December isn’t about the holidays in a law firm. It’s the final sprint to close out the fiscal year, get paid, and lock in profitability. But by then, it’s too late to fix the underlying issue: clients could have paid sooner. If you want to win in Q4, the time to act is now. Every year, law firms face the same challenge:  🔹 Cash flow targets must be hit by December 31st  🔹 Realization rates are under scrutiny  🔹 Distributions depend on it! The last two months of the year become a mad dash to close the gap between work performed and cash collected. Yet the obstacles to payment are often self-inflicted:  🔹 Follow-up emails don’t include all the necessary information, e.g. full copies of bills with outstanding A/R  🔹 Online payment options are missing or clunky  🔹 Clients can’t see their bills when paying to verify information The easier we make it to pay, the more you will get paid. When clients are ready to pay, they still run into obstacles:  🔹 They lose the bill or forget to act on it  🔹 They can’t easily pay online 🔹 They’re unsure what’s owed or for what, and don’t want to chase down answers Now multiply those small delays across hundreds of clients, and you’ve got a Q4 headache. Implementing a secure, user-friendly client payment portal is one of the highest ROI moves a law firm can make in Q3. Why?  🔹 Frictionless payments → faster collections  🔹 24/7 access → clients can pay on their own time 🔹 Clarity → bill details and balances are visible and trackable 🔹 Line-by-line reconciliation → speeds cash application A client portal doesn’t just help in the long term—it pays off immediately in accelerating collections. But most importantly, it sets you up for success when it matters most: Q4. 

One client delayed the invoicing by 10 days and ended up with an $10K cash crunch. All because the system that delivered the work wasn’t the system that asked for payment. That’s the thing about late invoices. They don’t just delay cash. They break momentum. 👉 You pause hiring. 👉 You delay vendor payments. 👉 You hold off on growth opportunities And the worst part? It’s avoidable. Here’s what I advise every founder to do: 1. Automate invoice triggers ⤷ Send them to go out the moment a milestone is marked complete. 2. Make payment frictionless ⤷ Attach payment links directly to the invoice. Fewer clicks = faster collections. 3. Clarify terms early ⤷ Don’t just hide them in the contract. Say it upfront, again in onboarding, and reinforce gently. 4. Schedule auto-reminders  ⤷ Three days before the due date. Again, on the due date. Let software do the nudging. 5. Review receivables weekly ⤷ Block 30 minutes. Check what’s due. Don’t outsource what you should be owning. PS: How do you make sure your clients understand your payment terms upfront?

𝙏𝙝𝙚 𝙎𝙚𝙧𝙞𝙤𝙪𝙨 𝘾𝙤𝙣𝙨𝙚𝙦𝙪𝙚𝙣𝙘𝙚𝙨 𝙤𝙛 𝙇𝙖𝙩𝙚 𝙋𝙖𝙮𝙢𝙚𝙣𝙩𝙨 Think late payments are just a minor inconvenience? According to PYMNTS, 93% of organizations experienced late payments in 2022.  Current global economic woes mean that figure will only worsen. A late payment here or there soon adds up. Before you know it, you’re facing cash shortages to pay your team’s salaries. What starts as a minor annoyance quickly becomes a widespread issue. Businesses face a multitude of challenges and delayed customer payments are often the hidden root cause: ❌ Inadequate cash to manage day-to-day business operations ❌ Insufficient working capital, delaying or preventing future investment ❌ An unhappy workforce, due to a lack of funds for salary increases or commissions ❌ High demand for resources to chase payments or resolve disputes ❌ Reputational damage, resulting from the inability to pay your downstream suppliers ❌ Negative impact on your credit line The impacts are more far-reaching than just your finance team – all of this stifles your business’s growth. Don’t let a seemingly small problem spiral out of control. Here’s how to safeguard your business against late payments: 1️⃣ Automation PYMNTS’ research shows that 87% of companies that leverage AR automation reported faster processing times, while 79% cited efficiency improvements. Automating your AR processes with dedicated software, like Tesorio, helps to eliminate manual errors, reduce time spent on data collation and analysis, and drive on-time payments. 2️⃣ Incentivize Customers to Pay On Time Some customers strategically pay late in a bid to improve their cash flow. But that has a knock-on effect on your cash flow. While you have no control over your customers’ cash flow management, you 𝙘𝙖𝙣 encourage them to prioritize your bill with early payment discounts.  There are numerous benefits to an early payment scheme. According to respondents to Taulia’s annual Supplier Sentiment Survey, these include > Reduce cash flow gap (49%) > Collections/payment predictability (26%) > Reduce DSO (9%) When you combine incentives with multiple payment options (including digital), you make it difficult for customers to avoid paying. 3️⃣ Tighten Credit Policy A robust credit policy to determine creditworthiness before a sale can help you avoid late payments further down the line. Leveraging an automated finance platform can help you personalize your credit policy to the size of the client or take into account payment history.  When your payment, credit, and collection policies are transparent, you improve the overall customer experience. Ultimately, a happy customer is more inclined to pay timely. Have you experienced late payments? Share your insights in the comments 👇 Don't miss out on valuable finance insights—follow for weekly updates! 💡 #fintech #accountsreceivable #automation #finance Source: Statistics from PYMNTS and Taulia

Improving payment delays and speeding up the time it takes your company to get paid ALWAYS begins with this… Understanding WHO is paying on time and who is not. It still surprises me that many finance leaders are not fully aware of their Days Sales Outstanding (DSO) or the credit exposure associated with each customer. This lack of knowledge can often extend to sales teams who may be selling to customers without being aware of their outstanding debts. Integrating basic visibility into accounts receivable can dramatically increase your company’s cash collection rate. When this visibility becomes a routine part of customer relations, it prevents difficult conversations down the line and becomes embedded in the customer journey. 💥 It comes down to this: The accounts receivable process should not be isolated from the customer experience. Customers, after all, go through a journey: they sign contracts, enjoy services, receive invoices, and then make payments. Recognizing payments as a fundamental part of this journey ensures that it gets the attention it deserves and remains a seamless cycle, encouraging future business with the company. So what needs to be done? To tackle late payments effectively, companies need to establish a structured process for accounts receivable. Many businesses, unfortunately, engage in this crucial task in a reactive manner— waiting until cash flow pressures mount. Instead, proactive and systematic processes should govern accounts receivable operations, running on predetermined timelines rather than reactive impulses. In reality, a significant portion of payment delays are due to technical issues such as missing invoices, lack of purchase order numbers, or issues with internal validation processes. By anticipating and addressing these technical barriers, companies can significantly speed up their cash collection across various industries. How do you see it? Any experiences to share? Would love to hear your thoughts in the comments.