How to get paid faster: simple steps for small businesses

Published Monday 26 January 2026

Table of contents

• Understanding late payments
• Why it's important to minimise late payments
• Common causes of late payments
• Assess client payment risk upfront
• Six steps to get paid faster
• Get paid faster with Xero
• FAQs on getting paid faster

Key takeaways

• Establish clear payment terms upfront by specifying exact due dates, accepted payment methods, and late payment fees on every invoice to eliminate client confusion and enable prompt payment.
• Invoice immediately after completing work and follow up within 1-3 days of the due date to demonstrate payment urgency and prevent further delays.
• Offer early payment incentives like a 2% discount for payments within 10 days to motivate clients to prioritise your invoice and improve cash flow.
• Use accounting software to automate invoicing processes, payment reminders, and tracking to maintain consistent follow-up and accelerate payment collection.

Understanding late payments

Late payments are invoice payments received after the due date. They create immediate cash flow problems by delaying the money you need for operating expenses. This makes budgeting difficult and can prevent you from paying your own bills on time.

Clients take about 21 days to pay invoices, paying 6 days late on average. You can read more in the Xero small business insights stats or look at the government's tips on avoiding late payments.

Why it's important to minimise late payments

Cash flow problems from late payments prevent you from covering essential expenses like payroll and loan payments. This creates a domino effect that strains relationships with suppliers, employees, and lenders. Timely payments solve this by maintaining steady cash flow for bills and budget planning.

To protect cash flow, you need to understand why people pay late and how to get paid faster.

Common causes of late payments

Understanding why clients pay late is the first step to getting paid faster. Most late payment causes are consistent across industries, making them predictable and preventable.

Inconsistent invoicing practices

Consistent invoicing practices mean sending invoices and follow-ups on schedule with identical payment terms every time. Inconsistent practices confuse clients and delay payments.

Example: You forget to invoice a client one month, then send two invoices the next month. Your client now faces a bill double their budgeted amount.

They might delay, ask to pay by instalments, or ignore the bill altogether, and look for a company that sends invoices more reliably.

Unclear payment terms

Unclear payment terms prevent on-time payments because clients don't know the exact amount owed or due date. Clear terms eliminate confusion and enable prompt payment.

Imagine that you typically get paid on receipt, and you've set up your budget around that schedule. You've done the work for a new client and you send them an invoice, but without a due date. Most of the client's suppliers offer 'Net 30' terms, so they assume you're willing to wait 30 days to get paid. Their late payment throws out your whole budget.

Not following up on your invoice

Not following up on invoices signals to clients that payment isn't urgent. This reduces payment priority and extends payment times. Regular follow-ups demonstrate that timely payment matters.

One such client receives an invoice but doesn't think it's pressing, so they prioritise other expenses. The next month, the same thing happens. Soon, they've forgotten about the invoice.

Financial difficulties

Financial difficulties cause clients to prioritise essential bills like rent, utilities, and payroll over other invoices. Your invoice often gets deprioritised during cash flow problems. This can lead to extended delays or complete non-payment.

Often, when clients are struggling financially, they make a few late payments and may eventually default, leaving some invoices unpaid. If you want to get paid, you need to proactively minimise this threat.

You can't tell what's happening with your client's finances. Are they paying late because they forgot or didn't know the due date, or are they paying late because they're in financial trouble? If it's the latter, there's a real risk you won't be paid, so it's important to act early to protect your cash flow. To prevent that, make sure you have clear payment terms, a consistent invoicing process, and that you follow up promptly.

Disputes over goods or services

Disputes over goods or services delay payments when clients question invoice accuracy. Disputed invoices often result in late payment or non-payment. Minimise disputes by ensuring invoice accuracy and clear service descriptions.

Assess client payment risk upfront

Before you do the work, take a few simple steps to check if a new client is likely to pay on time. This helps you avoid payment issues before they start.

For larger projects, consider asking for an upfront deposit or partial payment. This secures commitment from the client and improves your cash flow from day one. You can also ask for references from their other suppliers to get a sense of their payment habits.

A formal agreement or contract is also a good idea. It sets clear expectations for both sides and gives you a stronger position if a payment dispute arises later.

Six steps to get paid faster

These six steps work together to speed up payments. Combined with the right invoicing tools, they minimise late payments and maintain steady cash flow for your business.

1. Make your payment terms super clear

Clear payment expectations enable on-time payments by eliminating client confusion about terms and deadlines. Communicate payment terms upfront to prevent confusion and delays. Include these essential details on every invoice:

• Clearly set out payment terms like 'Net 30' (due in 30 days) or 'Due on receipt'
• Let clients know what types of payment methods you accept
• Outline any fees for late payments

2. Offer early payment incentives

A small discount for paying early can motivate clients to settle their bills sooner. For example, you could offer a 2% discount if the invoice is paid within 10 days.

This simple incentive can make your invoice a priority for clients and significantly improve your cash flow. Make sure the discount terms are clearly stated on the invoice.

3. Invoice promptly and professionally

Prompt invoicing accelerates payment by starting the payment clock immediately. Invoice clients right after service delivery or completion. Automate invoicing or establish a consistent daily invoicing schedule to maintain consistency.

To speed up payments, use an invoice template or accounting software that automates invoices.

4. Build strong client relationships

Strong client relationships improve payment reliability because respected service providers get prioritised during client cash flow decisions. Build these relationships by checking in with clients regularly to make sure they're happy. Don't just reach out when invoices are late.

Check in with clients regularly to make sure they're happy. Don't just reach out when invoices are late.

5. Follow up on late payments

Prompt follow-up on overdue invoices prevents further delays. Set up automated payment reminders or calendar alerts to ensure consistent follow-up timing. Contact clients within 1–3 days of the due date.

To reduce late payments further, reach out to clients over multiple channels. For instance, use email for the first reminder and then phone calls for each reminder after that.

6. Use accounting software to track and manage invoices

Accounting software automates invoicing processes and accelerates payments. Modern invoicing tools like Xero generate and send invoices automatically. They also provide automated payment reminders and late payment notifications. The invoice dashboard shows payment status at a glance, making it easy to track outstanding amounts and follow up efficiently.

Get paid faster with Xero

You can use Xero to minimise late invoice payments in your business. Xero's invoicing tools give you customisable invoicing, late payment notifications, and automated reminders to help you get paid on time.

Learn more about Xero invoicing tools to help you get paid faster or try Xero for free.

FAQs on getting paid faster

Here are answers to some common questions about getting paid faster.

What's the fastest way to get paid by clients?

The fastest way is to make it easy for them. Use clear payment terms, invoice immediately, and offer online payment options like credit cards or direct debit. These methods are much quicker than waiting for a cheque to arrive and clear.

How long should I wait before following up on late payments?

Don't wait long. A friendly reminder the day after the due date is perfectly acceptable. You can then schedule automated reminders to go out every week or so until the invoice is paid.

Should I charge late payment fees?

You can, and it often encourages timely payment. If you decide to charge late fees, you must state this clearly in your payment terms and on your invoice so your client is aware of it upfront.

What payment methods help me get paid faster?

Online payment methods are the clear winner. Accepting payments via credit card, debit card, or a service like Stripe or GoCardless means the money can be in your account in a few days, rather than weeks.

How do I handle clients who consistently pay late?

For clients who are always late, it's best to have a direct conversation. You might need to adjust your terms for them, such as requiring a deposit or full payment upfront before starting new work.