Revenue on paper doesn’t always translate to cash in the bank. But delayed receivables can choke your operations, hinder payroll, and make it impossible to grow.
Collecting money you’re owed shouldn’t be a battle. It also doesn’t have to feel awkward or aggressive. With the right systems, communication, and policies in place, you can protect your cash flow and your client relationships.
Here’s a detailed guide to help you tighten up your receivables process—professionally, politely, and effectively.
1. Establish Clear Payment Terms From Day One
The foundation of a smooth receivables process is clarity. Clients need to know what to expect before the first invoice ever arrives. Whether you’re sending a proposal, an engagement letter, or a contract, make sure payment terms are spelled out in plain language. At a minimum, include:
- When payments are due (Net 15, Net 30, due upon receipt, etc.)
- Whether late fees will apply—and if so, how much
- Your preferred and accepted payment methods (ACH, credit card, check, etc.)
- Any required deposits or progress payments for larger projects
Putting this in writing—and getting a signature if applicable—sets the expectation from the beginning. It also gives you a reference point if you need to follow up later.
Tip: Repeat your payment terms on every invoice, not just the initial contract. Repetition reduces misunderstandings.
2. Invoice Promptly and Accurately
Even businesses with excellent client relationships can suffer from poor invoicing habits. One of the most common mistakes small businesses make is waiting too long to send an invoice. The longer you wait, the longer it takes to get paid—and the less urgency the client feels.
Send your invoice as soon as the work is completed, or on the date scheduled in your agreement. Make sure the invoice is easy to read and clearly itemized, so the client knows what they’re paying for. Send the invoice to the correct person or department
According to a QuickBooks study businesses that invoice within a week of finishing a job get paid faster—sometimes by as much as 11 days.
Inaccurate or delayed invoices signal disorganization and create friction in the payment process.
3. Use Automation to Stay on Top of Follow-Ups
Manually tracking invoices, reminders, and due dates works fine when you have one or two clients. But as your business grows, it becomes time-consuming and easy to overlook.
Modern accounting tools like QuickBooks, FreshBooks, Xero, or Zoho Books can automate nearly every aspect of your invoicing process:
- Automatically send recurring invoices
- Trigger reminders before and after due dates
- Offer one-click payment options for clients
- Track who’s opened your invoice and when
These features remove the emotional labor of chasing money. You don’t have to remember to send that “just checking in” email—it’s already scheduled. Did you know that clients are more likely to pay an invoice that includes a built-in payment button?
Tip: Offer automated recurring payments.
4. Offer Small Incentives for Early Payment
If you’re working with clients who are generally reliable but tend to pay close to the due date (or after), consider giving them a reason to pay sooner. Offering a small discount for early payment can be surprisingly effective. Make sure the math works for your margins, but remember—cash now is often more valuable than full payment later. A 2% discount today could be worth more than waiting 30+ days for the full amount.
5. Be Proactive, Not Passive, With Follow-Ups
Even if you’ve sent the invoice and outlined your terms, clients sometimes forget—or get distracted by their own internal processes. That’s why a friendly, timely follow-up system is essential.
Here’s a professional cadence you can follow:
- 3 days before due date: Gentle reminder that the due date is approaching
- On the due date: Confirmation that payment is due today
- 3–5 days late: Friendly nudge asking if they need any information to process payment
- 7–10 days late: More formal reminder, potentially referencing late fees
Always assume the best at first—your tone should stay helpful and respectful, not accusatory. Most clients want to pay you, but they’re juggling priorities.
If a client is more than 2–3 weeks late, it’s appropriate to pick up the phone. A polite call can cut through email clutter and get the issue resolved much faster.
6. Require Partial Payments or Deposits Up Front
One of the best ways to protect yourself from slow payments is to collect money before starting the work. This isn’t just for creative or consulting services—it applies to almost any project-based business.
Consider breaking down payment into stages: 30% deposit to begin work; 40% at the project midpoint or delivery of key milestones; and 30% upon final delivery.
7. Know When to Escalate—And How to Do It Professionally
If a client is significantly late on payment—and has gone silent despite multiple reminders—it’s time to escalate. Your first step should be a direct phone call, followed by a formal notice.
In extreme cases, especially for large balances, you may need to engage a collections agency or attorney. This is rare—but your contract should outline your right to recover legal or collection costs, just in case. Always keep a paper trail. Save emails, invoices, and follow-up records.
8. Do Your Due Diligence With New Clients
If you find that you run into this problem frequently, it’s okay to verify. Before onboarding a new B2B client (especially for high-ticket work), take a few steps to protect yourself. You can ask for references, run a business credit check (through services like Dun & Bradstreet), or require payment up front for the first project. A little vetting on the front end can save you months of frustration on the back end.
8. Consider Bundling Your Services
Offering your services in bundles instead of à la carte can increase your revenue and simplify the customer experience. Grouping complementary services encourages your clients to spend more while enjoy greater value. It also creates predictable income for your business.
You might be busy, booked out, and invoicing regularly—but if clients are slow to pay, your business is essentially a hobby. By establishing clear terms, following up consistently, and communicating with confidence, you’ll build a process that protects your cash flow and strengthens your relationships—not strains them.
Bernstein Financial Services is a full-service accounting and tax firm that helps business owners meet their financial goals in their personal and professional lives. For personalized guidance, please schedule a consultation appointment with a Principal.