Quick answer
To get paid faster, agree terms before work starts, take deposits on larger jobs, invoice the day you finish, make paying easy with online options, and follow up on a schedule from day one. Small changes at each step can shorten the wait from around 50 days to around 15, which frees cash without borrowing.
Key points
- Agree payment terms in writing before work starts.
- Take deposits or progress payments on bigger jobs.
- Invoice immediately and make paying one click.
- Follow up on a fixed schedule, not when you remember.
You finished the job in March. The invoice went out in April. The money turned up in June. Meanwhile your wages, rent and GST all kept their dates.
Slow payment is one of the biggest silent drains on a small business. The good news is that most of the delay is within your control. Here’s a practical run-through, from before the work starts to the final chase.
Where does the time go?
An invoice’s journey from “job done” to “money in the account” has several stops, and each can add days:
| Stage | Typical delay | What you can do |
|---|---|---|
| Finishing to invoicing | 3 to 14 days | Invoice on the day |
| Invoice to customer’s inbox | 0 to 5 days | Send to the right person, by email |
| Customer approval | 5 to 20 days | Get the purchase order up front |
| Waiting for the payment run | 10 to 30 days | Shorter terms, or earlier due dates |
| Chasing | 7 to 21 days | Follow up on a schedule |
Trim a few days at each stop and fifty days becomes fifteen.
Before the work: set terms in writing
Most late payment starts with a vague conversation. Before you begin:
- Put terms on the quote. “Payment due 14 days from invoice date” is clearer than “usual terms”.
- Get the right name and contact. Find out who actually approves and pays invoices.
- Ask for a purchase order number where the customer uses them, so your invoice isn’t parked while someone hunts for approval.
- Include a late payment clause in your terms of trade, signed or accepted by the customer.
- Use deposits. For jobs over a certain value, take 20% to 50% upfront. It also tells you the customer is serious.
During the work: progress payments
On longer projects, don’t wait for the end. Break the job into stages and invoice at each milestone: materials ordered, first fix finished, practical completion. In the building trades, this is standard and reduces the risk that a large amount sits unpaid for months.
If your work involves retention, be aware that under the Construction Contracts Act retention money must be held on trust. Check your contract for when it is released, and diarise the date so it doesn’t lapse unnoticed.
When the work is done: invoice that day
The simplest speed-up of all: send the invoice the day you finish. Not at month end, not “when I get a chance”. Cloud tools like Xero and MYOB can create and send from your phone at the job site. Every day you wait is a day added to the customer’s clock, because their 14 days start when they receive it.
Waiting on big invoices and the bills won’t wait? Start the 60-second enquiry and we’ll look at bridging the wait.
Make your invoice easy to pay
A good invoice removes every excuse:
- Clear title: “Tax invoice”, your trading name and NZBN, and your GST number if you’re registered.
- Due date in bold, not buried in terms.
- Plain description of what was done, matched to the quote.
- Purchase order number if there is one.
- Payment details, with your bank account and a payment link or card option.
- A named contact for questions, with a phone number.
Online payment links, such as card, direct debit and bank transfer from the invoice itself, shorten payment time noticeably, because they turn “I’ll do it later” into “I’ll do it now”.
Follow up on a schedule
Late payers are rarely villains. They’re busy. A schedule keeps you consistent and polite:
| When | Action |
|---|---|
| 2 days before due | Friendly reminder with the invoice attached |
| Day after due | Short email: “Just checking this has landed” |
| 7 days overdue | Phone call to the person who pays |
| 14 days overdue | Email confirming the date you expect payment |
| 30 days overdue | Final notice; pause further work if terms allow |
Tools in your accounting software can send the first reminders automatically.
A phone script that works
Illustrative only.
“Hi Sam, it’s Maria from Harbour Joinery. I’m calling about invoice 1042 for $4,800, which was due on the 14th. Can you tell me if it’s been approved, and when I should expect the payment?”
Ask a question and get a date. If a date is promised, write it down and confirm by email the same day. Then, if it isn’t met, you have something specific to refer to.
Handling the customer who always pays late
For habitual late payers, the choice is to change the terms or change the relationship:
- Move them to payment on completion, or a deposit plus balance.
- Reduce their credit limit until the account is clear.
- Stop supplying until overdue invoices are settled, if your terms allow.
- Accept that a particular large customer takes 60 days, and fund the wait deliberately.
That last option is where a standing business cash line earns its keep. It lets you keep the customer and still pay your own bills on time.
Know the true cost of waiting
Late payment isn’t free. If you pay $40k a month in costs and your customers take 45 days instead of 14, you’re carrying roughly an extra month of costs permanently. Run the sum for your own business, then see our page on slow-paying invoices for ways to fund or shrink it.
Watch the calendar in summer
The January shutdown worsens everything. Customers’ accounts teams go on leave, payment runs slip, and invoices issued in December sit unpaid into February. Invoice earlier in December, chase before the break and set an expected-payment date for each large invoice. Our page on the summer shutdown gap has more.
Measuring your progress
Pick one number and watch it: the average number of days between invoice date and payment. Check it monthly in your accounting software, and compare it with the terms you offer. If you ask for 14 days and customers take 40, the gap is the opportunity. Celebrate small improvements, because each day shaved off an average of 40 releases a day of costs back into your account. Share the number with whoever sends invoices, so they know why prompt invoicing and polite follow-up matter to the whole business.
Put it together
Pick three changes and start this week: invoice on the day, add a payment link, and set up reminders. Then review in a month. Most owners find the average wait drops by two weeks or more without upsetting anyone.
If a gap remains while you tighten up, ask us about bridging it. The enquiry takes about a minute, there’s no credit check to ask the question, and your details stay with one team. A real person calls you.
Please give accurate figures for your outstanding invoices and when they’re due, so the cover fits.
Frequently asked questions
What payment terms should I offer?
Shorter is better, and 7 or 14 days is common for small jobs. Many businesses use the 20th of the month following for trade accounts. Whatever you choose, state it clearly on quotes and invoices.
Can I charge interest or fees on late invoices?
Only if the customer agreed to it in writing beforehand, such as in your terms of trade. Include a late payment clause in your terms so the option is there.
How soon should I chase an overdue invoice?
The day after it falls due, with a friendly reminder. Early, polite contact tends to get paid fastest and keeps the relationship intact.
What about customers who always pay late?
Tighten their terms, ask for deposits, or shift them to payment on completion. If they're a large customer you can't lose, consider funding the wait with a cash line.