“They haven’t paid me.”
If you own a business, you’ve probably said that sentence.
Maybe more than once this week.
You did the work. You delivered the product. You sent the invoice.
And now you wait.
Net 30 turns into Net 45. Net 45 starts looking suspiciously like Net 60.
“The check is being processed.”
“Accounting has it.”
“It was approved last week.”
Meanwhile, payroll is still Friday.
We hear this constantly from growing businesses.
“We’re profitable. We’re busy. We have more work than ever. So where is all the cash?”
Sometimes the answer is pretty simple.
Your customers have it.
Late accounts receivable can quietly choke cash flow, especially when the business is growing.
Before we finish, I’ll give you the four numbers I want every business owner looking at every single week. If those four numbers are right, “they haven’t paid me” becomes a whole lot easier to manage.
Growth Sucks Cash
Here’s the problem with “they haven’t paid me.”
You already paid everybody else.
Your employees got paid. Your suppliers got paid. The rent got paid. The insurance company definitely got paid.
But you didn’t.
And when you’re growing, that gets expensive fast.
Every dollar tied up in an unpaid invoice is a dollar you can’t use to fund the next job, hire the next employee, buy the next piece of equipment, or make payroll.
That’s the cash conversion cycle in real life.
How long does it take the money you spend doing the work to come back home as cash?
With Ignite Cashflow, we look for where that money gets stuck. It might be sitting in AR, WIP, inventory, payables, or somewhere else in the business.
Because there’s a big difference between making money and having money.
And payroll only accepts one of them.
“Due Upon Receipt”
I think a lot of us started our businesses believing these three words had a universally understood meaning:
Due Upon Receipt.
You send the invoice.
They receive the invoice.
They pay the invoice.
Seems pretty straightforward.
Then you get into business.
Apparently, “Due Upon Receipt” can mean after the next check run. Or after three approvals. Or when somebody gets back from vacation. Or after your customer gets paid by their customer.
Who knew?
Here’s the lesson:
“Due Upon Receipt” is a payment term. It is not a cash flow strategy.
Your cash flow strategy starts before the invoice ever goes out.
Can you get a deposit?
Can you progress bill?
Can you invoice at milestones?
Can you invoice weekly instead of monthly?
Can you negotiate better terms before you sign the contract?
Can you get ACH information upfront?
And how quickly does your team invoice after the work is complete?
If the job is done on Monday and you don’t invoice until Friday, congratulations. You just gave your customer four extra days to pay you.
For free.
Who’s Actually Calling Them?
Here’s one of my favorite AR questions:
Who is calling the customer?
Not who is supposed to call.
Who is actually calling?
Growing businesses get into trouble when everybody owns AR.
The owner thinks accounting is handling it. Accounting thinks the project manager is handling it. The project manager doesn’t want to upset the customer.
Nobody calls.
Another week goes by.
If AR matters to your cash flow, somebody needs to own it.
That doesn’t necessarily mean hiring a full-time AR clerk tomorrow. It could mean assigning a person and protecting dedicated time every week for collections.
But there needs to be a name next to it.
And It Better Be the Right Person
Collecting money is interesting because it’s partly a finance job and partly a people job.
Some people are great at it.
They’ll pick up the phone.
They’re relational without being passive. They’re persistent without being obnoxious. They can have an uncomfortable conversation and still preserve the customer relationship.
Other people would rather clean the office refrigerator than call somebody about a 60-day-old invoice.
They’re not bad employees.
They might just be in the wrong seat.
This is one of the places our Innermetrix assessments can be useful. They help us identify personality blind spots and understand who on the team may naturally be better suited for conversations like these.
And TRI-SHIFT® helps us think about how we’re communicating with the person on the other end.
You don’t need to call and scream:
“WHERE’S MY MONEY?”
You can say:
“Hey, I noticed this invoice is past due. What’s holding it up, and what do we need to do to get it resolved?”
Same objective.
Very different conversation.
Learn more about our Team Assessments
Don’t Call Everybody
Let’s say you pull your AR aging report and there are 200 invoices on it.
Where do you start?
Not invoice number one.
This is where we can borrow a little thinking from the Theory of Constraints and the 80/20 rule.
Find the receivables creating the biggest constraint.
Which are the oldest?
Which are the largest?
Which customers historically pay slowly?
Which have a dispute holding them up?
Most importantly:
Which invoices could turn into cash this week if somebody picked up the phone?
Your 20% of problem receivables may be causing 80% of your AR headache.
Go there first.
Be Careful With the Safety Net
This is also where a line of credit can be your best friend.
And potentially your worst enemy.
A growing company can absolutely have a legitimate timing problem. You have good receivables coming, but payroll doesn’t care that your customer is paying next Tuesday.
A line of credit can bridge that gap.
That’s what the safety net is for.
But here’s what I don’t want to see:
AR gets older.
The line gets bigger.
Nobody changes anything.
If that’s happening, the line of credit isn’t solving your AR problem.
It’s hiding it.
Or, put another way:
You didn’t solve the problem. You financed it.
Use the LOC to manage timing.
Don’t use it to make bad collection habits comfortable.
The Four Numbers I Promised You
This is where we make all of this manageable.
You don’t need to stare at an AR report every morning.
But somebody needs to know what’s happening every week.
With Ignite P.I.D., there are four numbers I want the team looking at and documenting weekly:
- What did we invoice?
- What did we collect?
- What are our current aged receivable days?
- What was our revenue goal?
That’s it.
Those four numbers start telling us whether the machine is working.
If we’re invoicing, collecting, and keeping our aged days under control while revenue grows, great.
If revenue grows 20% and AR grows somewhere around 20%, that might make sense.
But if revenue grows 20% and AR grows 70%?
I have questions.
Something changed.
Ignite P.I.D. helps us establish what normal looks like and then identify when the business moves outside of that normal range.
We borrow some thinking here from lean manufacturing. When a number starts moving significantly outside its normal variation, including roughly two standard deviations from the average, we want a signal.
On the dashboard, that signal can be red.
Red doesn’t necessarily mean disaster.
It means:
Go look.
Maybe one big customer hasn’t paid.
Maybe invoices aren’t going out quickly enough.
Maybe there’s a billing error.
Maybe collections stopped happening consistently.
I don’t care which one it is yet.
I care that we saw it.
Because I want the numbers telling us there’s an AR problem before the bank account does.
So, They Haven’t Paid You
Okay.
Now what?
Don’t just wait.
Figure out where the cash is stuck.
Make sure somebody owns AR.
Make sure they’re the right person for the job.
Ask for the money.
Structure better payment terms.
Go after the receivables that actually matter.
Use your line of credit as a safety net, not a hiding place.
And every week, know those four numbers.
This is why we connect Ignite Cashflow, TRI-SHIFT®, Innermetrix assessments, and Ignite P.I.D.
Because AR isn’t just an accounting problem.
It’s a cash problem.
A process problem.
A people problem.
And sometimes it’s a phone-call problem.
You did the work.
You paid everybody else.
It’s okay to ask to be paid, too!
