Collecting on time, paying on purpose

The problem it solves

The invoice goes out three weeks after the work is delivered, and not because anybody decided that. It accumulated. The person who invoices waits for the report, the report waits for the technician, and the technician is already on the next job. The clock the client counts starts the day the document lands on their desk, so the company gives away those three weeks before the carefully negotiated payment term has even begun.

Collection starts on the day the owner gets around to calling. With no sequence in place, one client gets called twice in a week and another goes two months without contact. The aging report is printed and nobody opens it. The client who always pays late holds exactly the same terms as the client who pays on time, because that decision has not been revisited since it was made and nobody formally owns revisiting it.

The same thing happens on the other side with less noise. Supplier payments get decided by whoever called today, so the one who pushes hardest is paid first and the one offering the best conditions waits. The combined effect is that the company's cash position depends on how the owner's week is going, while the client relationship is spent in a single tense call at the end instead of being sustained by orderly contact from the start.

What it covers

The workshop treats collections and payments as one system of decisions, because cash coming in and cash going out are governed by the same rules and are almost always handled by people who never talk to each other. It opens on the side the company controls entirely: the time between delivering and invoicing. In a group exercise participants draw their real invoicing chain, step by step, and put days against each stretch. A week or two usually shows up there that belongs to no client at all.

The second block works the aging report. On a real one, participants assign an action to each bucket, define who carries it out and when, and write the full collection sequence: who calls, with what message, what happens when there is no answer, and at what point the tone changes. It includes a role play of the difficult call, the important client who has not paid in two months, because that conversation is usually avoided for want of a prepared opening line rather than for want of nerve.

The third block revisits credit terms client by client, using evidence of how each one actually pays rather than the general impression the company holds of them. The group examines what it costs to carry the client who always pays late, and defines the point at which a balance stops being an internal matter, which each company sets as its own criterion and pursues with whatever support belongs outside this room.

The closing block crosses to the payment side. Participants build an explicit priority criterion, what gets paid first when the cash does not stretch, and assess early-payment discounts as a decision with an opportunity cost rather than an offer to be accepted by reflex. What stays behind is a routine the administrative team can run without the owner stepping into every individual case.

What participants learn

• Design the flow that shortens the time between delivering the work and issuing the invoice.
• Interpret an aging report and assign an action to each bucket.
• Implement a collection sequence that does not depend on the owner and does not burn the relationship.
• Evaluate each client's credit terms against evidence of how they actually pay.
• Prioritize supplier payments on an explicit criterion rather than on pressure.

Agenda

1. 01Invoicing the day the work is delivered
2. 02Aging buckets and the action each one calls for
3. 03The collection sequence: who calls, when, and with what message
4. 04Credit terms by client, and when to revise them
5. 05The client who always pays late, and what keeping them costs
6. 06A payment criterion for suppliers, and early-payment discounts
7. 07When a balance leaves the internal process

What the organization leaves with

• A written invoicing flow, with an owner and a cut-off point at every step.
• The collection sequence documented: who calls, at which bucket, with what message, and what happens when there is no answer.
• A written payment criterion for suppliers, setting the order the company holds to when cash does not stretch.
• The administrative team will be able to run routine collection without the owner stepping into each case.