Customers Owe You Money? How to Measure It, and Get It Paid

What you are really owed

Your accounting software has an aged receivables report. It is a start, but it is only as good as what was invoiced. The real list comes from matching work done to money received: every job completed, the amount it was worth, and the payment that should have followed it. Jobs finished but never invoiced do not appear on any receivables report and are the most expensive kind of debt.

Debtor days

Debtor days = what you are owed ÷ annual sales × 365. On $900,000 of sales with $110,000 owed, debtor days are about 45. If your terms are 14 days, a month of sales is sitting with your customers.

Every day matters in dollars: at $900,000 a year, one day of debtors is about $2,500 of your cash. Bringing 45 days back to 25 frees about $49,000, once, permanently.

Where it gets stuck

• Not invoiced: work done, invoice never sent or sent weeks late.
• Waiting on a third party: a finance company, an insurer, a rebate scheme or a builder’s progress claim. Each has its own paperwork, and a missing form can hold a payment for months.
• Disputed: a small defect or a missing document the customer is using as a reason to wait.
• Just slow: customers who pay when chased and not before.

Getting paid faster

1. Invoice the day the job is done, from your phone, before you leave the site.
2. Take a deposit on any job with materials: 20–50% up front is normal in most trades.
3. Make it easy to pay: a pay-now link or card on the invoice, not just bank details.
4. Remind on a schedule: a polite reminder at the due date, a call at seven days over, a firm letter at thirty.
5. Chase third parties weekly: keep a list of what each finance partner or scheme still needs from you.

Then set your prices knowing the real cost of waiting. A break-even analysis that ignores debtors overstates how much cash the business generates.