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Late payments are a loan you never agreed to make

Every invoice paid 30 days late is an interest-free loan from you to your customer. Here is how to see what it really costs, and five ways to get paid sooner.

By the Linkun Foundation team · · 2 min read
Late payments are a loan you never agreed to make

When a customer pays you 30 days late, you are lending them money. There is no interest and no paperwork, and nobody asked whether you could afford it.

For a large company, that may not matter. For a small business, the money in unpaid invoices is often the same money that should cover payroll, rent, or next month's supplies. When it is stuck, owners fill the gap with a credit card, a personal savings account, or a skipped paycheck of their own.

Three costs most owners never add up

  1. The financing cost. If you carry a balance on a card or a line of credit while you wait to be paid, the interest is really the price of your customer's delay.
  2. The chasing cost. Reminders, phone calls, and re-running cards take hours. Those hours could go to paid work or rest.
  3. The write-off cost. The longer an invoice sits, the less likely it is to be paid at all.

Your customers are not your bank. You can be kind and still be clear about when payment is due.

See your number

The calculator below adds up all three costs from your own numbers. Nothing you type in is stored.

Five ways to get paid sooner

Try this week
  1. Put the due date in the subject line. "Invoice #104, due Nov 20" works better than "Invoice attached."
  2. Shorten your terms. If you offer 30 days out of habit, try 15 days, or due on receipt for new customers.
  3. Make paying easy. Every extra step, like printing a check or finding a stamp, adds days.
  4. Consider a small early-payment discount for big invoices. Check the math first with the early-payment discount calculator. Discounts can be more expensive than they look.
  5. Follow up on a schedule, not a mood. Same reminders, same days, every time.
Get paid · Free calculatorAccounts receivable health →See how fast invoiced sales turn into cash, how far past your terms customers run, and what that delay costs. Printable checklistGet-paid-on-the-spot checklist →Fifteen habits that close the gap between finishing the job and having the money in your account.
Free 1:1 coachingTalk it through with a mentorBook a free session with the Linkun Foundation team. Bring your numbers, your questions, or just the thing keeping you up at night.
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Frequently asked questions

How do late payments hurt a small business?

They tie up cash you need for payroll, rent, and supplies, push you to borrow or use credit cards, take hours of follow-up, and raise the chance an invoice is never paid.

How can I get customers to pay invoices faster?

Put the due date in the subject line, shorten your payment terms, make paying easy with card and ACH options, consider a small early-payment discount for large invoices, and follow up on a set schedule.

Cash flowGetting paid

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