Get Paid Faster: Invoicing Tips for Small Businesses

Published Friday 20 March 2026

Table of contents

• Common causes of late payments
• Set payment terms that encourage faster payment
• Make it easy for clients to pay you
• Invoice promptly and professionally
• Follow up on late payments
• Build strong client relationships
• Use accounting software to track and manage invoices
• Get paid faster with Xero
• FAQs on getting paid faster

Key takeaways

• Set clear payment terms upfront with shorter windows like Net 15 or due on receipt, and discuss these terms with clients before starting work to avoid confusion and delays.
• Make payment as convenient as possible by offering multiple payment methods, enabling one-click online payments, and including clickable payment links directly in your invoices.
• Create a systematic follow-up process that escalates from automated email reminders on day 1 past due to personal calls by day 14, showing clients that timely payment is a priority.
• Invoice immediately after delivering goods or completing services, and use templates or accounting software to automate the process and maintain consistency.

Common causes of late payments

Late payments happen for predictable reasons. When you understand why clients pay late, you can prevent delays before they start. The most common causes across industries:

Inconsistent invoicing practices

Inconsistent invoicing makes it hard for clients to pay on time. If you forget to invoice one month and send two the next, your client faces an unexpected double bill.

They might delay payment, request instalments, or ignore the invoice altogether. Clients value suppliers who invoice reliably and may seek them out.

Unclear payment terms

Unclear payment terms lead to missed deadlines. If your invoice lacks a due date, clients will assume their standard terms apply.

For example, you might expect payment on receipt while your client assumes Net 30. When expectations don't match, your entire cash flow gets thrown off.

Not following up on your invoice

Skipping follow-ups signals that payment isn't urgent. Some clients need reminders to prioritize your invoice over other expenses.

Without prompts, clients forget invoices. A client who doesn't hear from you may assume there's no rush to pay.

Financial difficulties

Financial difficulties cause clients to prioritize their most pressing bills first, a widespread issue that has led institutions like the Bank of Canada to take action by lowering the policy rate. During such times, your invoice may fall to the bottom of the list, leading to late payments or defaults.

It's often hard to tell if a client is struggling financially or simply forgot. That's why clear payment terms, consistent invoicing, and prompt follow-ups matter for every client.

Disputes over goods or services

Disputes over goods or services delay payment. Clients hold off on paying invoices they disagree with, whether due to billing errors or misunderstandings about what was delivered.

Minimize mistakes and clearly itemize what you're billing for. When clients understand exactly what they owe, they're more likely to pay promptly.

Set payment terms that encourage faster payment

Strategic payment terms directly impact how fast you get paid. The right terms encourage prompt payment while protecting your cash flow.

Set terms that work in your favour:

• Choose shorter payment windows: Net 15 or due on receipt gets you paid faster than Net 30 or Net 60
• Request deposits upfront: Ask for 25–50% before starting work on larger projects
• Offer early payment discounts: A 2% discount for payment within 10 days motivates faster action
• Charge late payment fees: Clearly state penalties for overdue invoices
• Use milestone billing: Break large projects into phases with payments due at each stage

Discuss terms with clients before you start work. Make sure they review and agree to your terms upfront.

Make it easy for clients to pay you

Making it convenient to pay speeds up how fast you collect. The easier you make it for clients to pay, the faster money reaches your account.

Remove friction from the payment process:

• Offer multiple payment methods: Accept credit cards, bank transfers, and digital wallets like PayPal
• Enable online payments: Let clients pay directly from the invoice with one click
• Include payment links: Embed clickable payment buttons in digital invoices
• Set up recurring payments: Automate billing for regular clients with subscription or retainer arrangements

Clients who can pay instantly are less likely to delay. Every extra step in the payment process increases the chance of a late payment.

Invoice promptly and professionally

Invoice promptly to get paid faster. The sooner you send an invoice, the sooner you get paid.

Build invoicing into your workflow:

• Invoice immediately: Send invoices as soon as you deliver goods or complete services
• Use templates: Standardize your invoices so they're quick to create and easy to read
• Automate where possible: Set up recurring invoices for regular clients
• Schedule invoicing time: Block time daily or weekly to stay on top of billing

Use an invoice template or accounting software that automates invoices. Late invoices lead to late payments, so make invoicing a top priority.

Follow up on late payments

Following up on late payments protects your cash flow. A consistent reminder process keeps your invoice top of mind and signals that payment matters.

Create a follow-up system that escalates:

1. Day 1 past due: Send an automated email reminder with the invoice attached
2. Day 7 past due: Follow up with a personal email checking if there are any issues
3. Day 14 past due: Call the client directly to discuss payment
4. Day 30 past due: Send a formal letter outlining next steps
5. Day 60+ past due: Consider collection services or legal action as a last resort. This is a standard debt recovery step, and even the Canadian government has guidelines for fees payable to a collection agency.

Use multiple channels. Email works for initial reminders, but phone calls show urgency. Find the right balance between persistence and knowing when to move on.

Learn more about chasing outstanding invoices.

Build strong client relationships

Strong client relationships lead to faster payments. Clients who value working with you are more likely to prioritize your invoices.

Build trust through consistent communication:

• Communicate openly: Be clear about expectations, timelines, and any changes to scope or pricing
• Check in regularly: Reach out regularly, not only when invoices are late, and show genuine interest in their business
• Deliver exceptional service: Clients who are happy with your work want to maintain the relationship
• Reward loyalty: Consider discounts or perks for long-term clients who pay on time

How clients pay you reflects how they value working with you. When clients see you as a valued partner, they're more likely to pay promptly.

Use accounting software to track and manage invoices

Accounting software automates how you invoice and tracks what clients pay, so you spend less time chasing money. The right tools handle repetitive tasks and show you what's paid and what's outstanding.

Look for software that helps you:

• Generate professional invoices: Create and send invoices quickly using templates
• Automate reminders: Set up automatic payment reminders for overdue invoices
• Track payment status: See at a glance which invoices are paid, pending, or overdue
• Accept online payments: Let clients pay directly from the invoice
• Reconcile automatically: Match payments to invoices without manual data entry

Xero's invoicing tools do all of this. You can customize invoices, set up automated reminders, and use the invoice dashboard to see your cash flow as it happens. Find out more about how Xero generates and sends invoices.

Get paid faster with Xero

Xero helps you get paid faster with invoicing tools designed for small businesses. Create professional invoices, automate payment reminders, and track what's paid and outstanding from one dashboard.

Ready to speed up your payments? Get one month free and start getting paid faster today.

Learn more about how Xero's invoicing tools can help you get paid faster.

FAQs on getting paid faster

Common questions about speeding up payments for your small business.

What payment terms get you paid fastest?

'Due on receipt' or 'Net 15' terms get you paid fastest. Shorter payment windows create urgency and reduce the chance of invoices being forgotten.

Should you offer discounts for early payment?

Yes, early payment discounts can motivate faster payment. A common approach is '2/10 Net 30', which offers a 2% discount if paid within 10 days.

How do you politely ask a client to pay faster?

Send a friendly reminder before the due date, then follow up promptly if payment is late. Keep the tone professional and focus on resolving any issues that might be causing the delay.

What's the best payment method for small businesses?

Online payments through credit cards or bank transfers are fastest. They reduce friction and let clients pay immediately when they receive your invoice.

When should you stop chasing an unpaid invoice?

Consider stopping after following up unsuccessfully for 90 days. At that point, weigh the cost of continued effort against the invoice value and consider collection services or writing off the debt. This principle is recognized in government policy, where an amount owed is deemed nil if it is $2.00 or less, acknowledging that some debts aren't worth the cost of collection.