How to Collect Receivables Faster: A 30-Day Routine for Startups
Collecting faster is the cheapest way to fund a business. A simple routine works: invoice on the day of delivery, state clear terms, check ageing weekly, contact customers before the due date and escalate on a fixed schedule. Measure debtor days each month so you can see whether the routine is working.
Before the invoice
- Agree payment terms in writing before work starts
- Ask for a deposit or staged payments on larger jobs
- Confirm the customer's accounts contact and purchase order process
The invoice
- Send it the day you deliver, not at month end
- Show the due date, payment method and what the invoice refers to
- Make it easy to pay: bank details, payment link if you use one
The 30-day routine
- Day 0: invoice sent and confirmed received
- Day 5 before due: friendly reminder with the invoice attached
- Due date: check payment; call if unpaid
- Day 7 after due: second reminder, ask for a payment date
- Day 14 after due: call the decision maker, agree a plan, consider pausing new work
- Day 30 after due: escalate according to your policy and review credit terms
Track it
- Debtor days (DSO): receivables divided by revenue, times the days in the period
- Receivables ageing: the share of invoices over 30, 60 and 90 days
- Top 5 overdue customers, reviewed weekly
Our monthly KPI dashboard template calculates debtor days.
Common mistakes
- Invoicing late or with missing details
- No one owns collections
- Chasing only when cash is tight
- Continuing to supply a customer who is far overdue
Frequently asked questions
Debtor days (DSO) show on average how many days customers take to pay: receivables divided by revenue, multiplied by the number of days.
When should I chase an overdue invoice?A friendly reminder just before the due date and a call on the due date or the day after works well. Escalate on a written schedule.
Should I charge late fees?Only if they are in your agreed terms and allowed in your jurisdiction. Check with your advisor.
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Written by Akram El-Karrar, CPA, from the work we do for startups every week.