Late payments are the #1 cash flow killer for independent contractors. According to industry data, 64% of small businesses have invoices that are past 30 days overdue. Here's how to fix that.
The longer you wait to send an invoice, the longer you wait to get paid. The best contractors invoice the same day the work is completed — ideally before they leave the job site. Mobile invoicing tools make this possible in under a minute.
Every extra step between receiving an invoice and paying it reduces your chances of getting paid quickly. Include:
Contractors who include online payment links get paid 2-3x faster than those who only accept checks.
Net 30 is standard, but it's not a law. Many successful contractors use Net 15 or Due on Receipt — especially for new clients. You can always extend terms for trusted, repeat clients.
If you do use Net 30, try adding a 2% early payment discount for paying within 10 days ("2/10 Net 30"). Many businesses will take that deal because their AP departments are incentivized to capture discounts.
Most late payments aren't malicious — people just forget. Set up automatic email reminders at these intervals:
Automated reminders remove the awkwardness of chasing payments personally.
For any project over $1,000, request a 25-50% deposit upfront. This accomplishes three things: it confirms the client is serious, it covers your material costs, and it reduces the final amount that could go unpaid.
Include late payment terms in your contract and on every invoice. A standard late fee is 1.5% per month (18% APR). The fee itself isn't the money-maker — it's the psychological incentive to pay on time. But you have to actually charge it, or clients will learn they can ignore it.
This is the hardest one, but the most important. If a client consistently pays 60+ days late, they're costing you money — not just in delayed cash flow, but in the time you spend chasing them. Replace them with clients who respect your business.
One-click online payments, automated reminders, and real-time invoice tracking. Stop chasing payments and start getting paid on time.
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