Clients not paying invoices? Change your payment terms

Time is money. You may need new payment terms for your agency.

Sometimes, the hardest part of owning a business isn’t finding clients or delivering exceptional services—it’s getting those clients to pay up. This might seem straightforward, right? The deal is simple: you agree on the work, you complete the work, and then they pay you for it. However, the reality often doesn’t follow this neat sequence.

This is a common struggle I discuss with my coaching clients, and my top advice is always to secure payment upfront. Here’s why: time is inherently valuable, equating directly to money in the business world. In my agency, for instance, if a client desires the attention and expertise of me or my team, this commitment is reflected in the cost, which is required upfront. This approach guarantees that your expenses are covered from the get-go. It allows you to dedicate your resources fully—be it time or personnel—to the client’s project without financial worry.

I can’t stress enough how time is equivalent to money. If a client hesitates or refuses to pay, you’ll invest even more time (which, remember, equals money) to secure the payment. In the worst-case scenario, this could involve engaging legal assistance depending on the sum owed, leading to further financial outlay from your end.

Why endure such stress and financial risk?

It’s time to rethink the traditional billing model of issuing invoices at the end of the month with a 30-60-90 days payment window. Instead, adopt a policy where payment is due at the beginning of the month before any work starts, no later than the 5th. This approach is akin to everyday transactions—when you dine out or shop, you pay immediately, not months later.

Admittedly, there are exceptions, such as working with larger corporations that adhere to strict payment schedules, which might need to be more flexible. While these entities generally present a more reliable income stream than individuals or small to medium enterprises (SMEs), surprises can still occur. Nevertheless, as the owner of your business, you have the authority to set your payment terms. Don’t let clients dictate them.

Remember, you are the CEO, the founder, the visionary behind your agency. Recognize your value and stand firm in it. Transitioning to upfront payments may require some adjustments, and offering a degree of flexibility to a loyal client facing an unusual situation is okay. However, this should be the exception, not the rule.

Stop wasting valuable resources—time and money—chasing after payments post-delivery.

I’d love to hear from others on this topic. What’s your biggest challenge when getting clients to pay invoices? Have you found effective strategies for securing payment upfront, or do you need help implementing such a policy? Let’s share experiences and tips to help each other navigate this tricky aspect of business management.

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