Finance
June 22, 2021

Long payment terms: how to stop them harming your business

Long payment terms: how to stop them harming your business

Argh!

☝ That’s the default feeling when an invoice is overdue.

Why? Because in almost all cases, the delay is out of your hands. And as projects get bigger and more complex, there’s a tendency for payment times to get longer and longer. But in my opinion, you can and should avoid getting into an argument with your customers over late payments.

Unfortunately, once you open up the conversation about late (and delayed) invoice payments the bad feelings tend to stick around. Sometimes they ruin customer relationships forever. 

And for a growing company, that can be deadly.

What’s more is that industries with an ingrained culture of long payment times often don’t realise the damage they cause. You’ll sometimes hear “that’s just the way things are, deal with it”. But often the delayed payment is due to your customer’s customer not paying them on time. So you’re trapped in a chain of slow payments.

This is exactly why we created the credit stretch. You need to get your invoices paid faster. Your customer needs to get their invoices paid faster, so they can pay you. A credit stretch gives them extra time (up to 90 days extra) to pay your invoice, while you get paid right away.

But sometimes your customer doesn’t want to stretch their credit. So what do you do then? We’ve created a simple framework for getting your invoices paid faster.

The Fellow Pay framework for getting paid faster

  1. Invoice at the earliest possible moment. Unless there’s an agreement for when you should invoice, do it immediately to avoid unnecessary delays.

  2. Remove the need to remember when to invoice. Your brain is a thinking tool, not a storage device. If a client hasn’t paid you on time it could be because they have forgotten.

    It happens a lot. But that doesn’t make it any less frustrating because it’s something we can’t control.

    Or can we? What about setting a calendar reminder to remind your client that the payment is due tomorrow, or in 2 or 3 days. This proactive approach isn’t rude or pushy. It’s professional. You’re not asking for the payment early. You’re simply noting that the payment is due soon.

  3. Ask your clients when they prefer the invoice. You don’t necessarily have to cater to their needs, but it helps to know their expectations. If you disagree, just say. It never hurts to ask. You never know whether they’re struggling with cash flow issues too. If your client gets paid on the 1st, perhaps you agree to get paid on the 4th. Doing that will surely create a stronger relationship between the two of you.


Often, we get paid late because we didn’t communicate clearly. We didn’t ask the customer when they would prefer to pay. We didn’t ask if we could come to an agreement that works for both of us. We didn’t ask if we could do something to speed up the payment.

Instead we just sit and wait. And then we blame the customer for paying late. There’s probably a good explanation for it. The most likely one being that they’re also waiting for their customer to pay them.

Some companies just can’t pay

And that’s where Fellow Pay comes in.

The credit stretch, by Fellow Pay, essentially shifts the risk of the buyer not paying away from the seller. 

A little like how credit cards work. You get paid now (like a shop would) and your customer defers the payment for 60 or 90 days (like you do when you buy something on your credit card).

Unlike other finance options, where you sell your invoice to a finance company and they chase your customer to pay - which is impossible if they don’t have the money yet. Fellow Pay extends your customer’s credit, without cost, so they can relax a little while waiting for their customer to pay.

It’s changing the way SMEs get paid. 

And you can apply for free, today.

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