Getting paid shouldn’t be the hardest part of running your business. But for many contractors and small business owners, outstanding invoices create constant cash flow stress. Improving collections starts with fixing your system, not chasing invoices harder.

Invoice immediately after completing work or hitting a milestone. The clock on getting paid starts when you send the bill. Waiting a week to invoice adds that same delay to your payment. For larger projects with progress billing, invoices should go out on a set schedule tied to project phases.

Set clear payment terms before work begins. Net 30 is standard but doesn’t work for every business. If your cash flow needs faster turnover, quote Net 15 or even Net 10. For larger projects, require a deposit before starting and progress payments throughout. Customers who won’t agree to reasonable terms upfront often become collection problems later.

Make it easy for customers to pay. If you’re only accepting checks by mail, you’re creating friction. Online payment options through QuickBooks or a payment processor get money to you faster. Credit card fees feel like a cost, but getting paid in 3 days instead of 30 is often worth 2-3%.

Follow up systematically. Don’t wait until an invoice is 60 days overdue to reach out. Send a reminder at 7 days past due. Call at 14 days. Have a clear escalation process that happens consistently. The businesses that collect well aren’t the ones with aggressive tactics. They’re the ones with predictable processes.

Age your receivables weekly. Know which invoices are current, which are 30 days, and which have hit 60 days or more. The longer an invoice ages, the less likely you are to collect the full amount. Prioritize older invoices but don’t let current ones slide into that category while you’re distracted.

For contractors, don’t let work get ahead of payment. Progress billing exists for a reason. If a customer misses a draw payment, stop work until you’re caught up. This is uncomfortable but essential. Finishing a $50,000 job while owed $20,000 in past-due draws puts you in a terrible negotiating position. A bookkeeper in American Fork who understands construction can help you structure progress billing so cash keeps pace with job completion.

Sometimes the issue isn’t your collection process but customer selection. Repeat problems with the same customer type might mean you need to change who you work with or require different terms for certain project sizes.

Consider having someone else handle your receivables. When you’re the one doing the work and asking for payment, the conversation gets awkward. Accounts receivable management handled by a third party can follow up professionally without the personal relationship complications. You focus on the work while someone else makes sure you get paid for it.