How to Stop Late Payments from Draining Your Business

Sunelle
Oct 3
2 min read

Here’s the thing… signing clients is exciting. Doing the work is satisfying. Sending the invoice feels like progress.

But waiting (and waiting) for the money to land? That’s where things fall apart.

Late payments are more than annoying, they’re a silent profit killer. A recent study shared by Inside Small Business found that over half of ANZ companies lose income because of late invoices, and small business owners are burning through up to 12 working days a year chasing money that should already be in their bank accounts (source).

That’s 12 days you could’ve spent building, selling, or even taking a well-earned break.

So how do you stop the late-payment circus? Here are proven strategies small business owners are using right now to get paid on time, every time.

1. Make It Personal

One founder swapped their “accounts@company.com” sender for their personal name. Instantly, payment times improved. Why? People respond faster to people—not faceless systems.

2. Always Take a Deposit

Think of a deposit as your “date claimer.” It says: Yes, I’m serious—and yes, I’ll pay on time. For new projects, 20–30% upfront is the sweet spot. It improves cash flow and weeds out the tyre-kickers.

3. Break It Into Milestones

Instead of one big invoice at the end, split payments into stages:

30% upfront before materials or work start
40% midway
30% at completion

This spreads the load, reduces your risk, and keeps the money flowing.

4. Build Late Fees Into Contracts

It doesn’t make you “that” business. It makes you smart. A clear late fee policy sets the expectation upfront and gives you leverage if things drag out.

5. Automate the Chase

Manual follow-ups are a time-suck. Use tools like Xero or QuickBooks to issue invoices the moment work is complete, then set up automatic reminders at 7 and 10 days. You’ll stay top of mind without lifting a finger.

6. Pick Up the Phone

Sometimes the fastest way to clear an overdue invoice is the simplest—just call. More often than not, it’s a misunderstanding, and a quick chat sorts it.

The Bottom Line

Late payments don’t just drain your bank balance. They drain your focus, your energy, and your ability to scale. But with deposits, milestones, automation, and clear terms, you can flip the script.

Because let’s be honest—you didn’t start a business to become a debt collector.

Stop Chasing Invoices. Start Growing Your Business.

💸 Late payments aren’t just frustrating—they’re stealing your time and profit. Let’s fix that.

👉 Book your time with us today! Whether you're looking for expert guidance or tailored virtual services, we’re here to help you succeed.

📞 Call us at +61 2 8503 8282 ✉️ Email us at hello@avovirtualservices.com.au or book online to chat to Sunelle https://scheduler.zoom.us/introduction-to-avo-virtual-services-how-can-we-help/introduction-to-avo-virtual-services-how-can-we-help

Get back control of your cash flow and finally breathe easy.