[et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” background_color=”#F5F6F6″ use_background_color_gradient=”on” background_color_gradient_direction=”240deg” background_color_gradient_stops=”rgba(255,255,255,0) 0%|#f5f6f6 36%|#faae1c 36%” custom_padding=”0px||0px|||” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row column_structure=”3_4,1_4″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”3_4″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_blurb title=”Debtors” _builder_version=”4.27.6″ _module_preset=”default” header_level=”h1″ header_font=”–et_global_heading_font|700|||||||” header_text_align=”left” header_text_color=”#F5F6F6″ header_font_size=”52px” header_line_height=”3.1em” positioning=”relative” vertical_offset=”25px” custom_padding=”|||0px|false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_4″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_image src=”https:\/\/empoweringaccountants.com.au\/wp-content\/uploads\/2026\/03\/EA-Logo.png” title_text=”EA Logo” _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row column_structure=”1_2,1_2″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”1_2″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_blurb title=”Why aren’t your clients paying?” image=”https:\/\/empoweringaccountants.com.au\/wp-content\/uploads\/2026\/08\/Tortoise-Image.jpg” _builder_version=”4.27.6″ _module_preset=”default” theme_builder_area=”post_content” title_text=”Tortoise Image” hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n
Many firms still have several slow paying clients.<\/span> [\/et_pb_blurb][et_pb_blurb title=”Tight cash flow – True or Excuse?” image=”https:\/\/empoweringaccountants.com.au\/wp-content\/uploads\/2026\/08\/1772672303278.jpg” _builder_version=”4.27.6″ _module_preset=”default” theme_builder_area=”post_content” title_text=”1772672303278″ hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n In the many conversations that I have had with accountants about their debtors, the number one reason given by clients is tight cash flow. Is this a true reason or just an excuse for the client to keep using your firm as their banker?<\/span> [\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_2″ _builder_version=”4.27.6″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_blurb title=”Why deal with slow paying debtors?” image=”https:\/\/empoweringaccountants.com.au\/wp-content\/uploads\/2026\/08\/1772582885488.jpg” _builder_version=”4.27.6″ _module_preset=”default” theme_builder_area=”post_content” title_text=”1772582885488″ hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n Most partners I speak with have a good cash flow and are quite comfortable financially.\u00a0As a result, they don\u2019t address the problem of slow paying debtors because they aren\u2019t in that much pain. Their attitude is that the client is good for the money and will pay eventually.<\/span> <\/span> [\/et_pb_blurb][et_pb_blurb title=”Script for slow-paying clients” image=”https:\/\/empoweringaccountants.com.au\/wp-content\/uploads\/2026\/08\/1772763435604.jpg” _builder_version=”4.27.6″ _module_preset=”default” theme_builder_area=”post_content” title_text=”1772763435604″ hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n Sometimes if clients are not responding to the requests of your debtors team for payment, the partner has to step in and talk with the client.\u00a0Please note that this should only be done when the team is unable to secure a commitment\/payment from the client.<\/span> [\/et_pb_blurb][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Many firms still have several slow paying clients.Why?\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0The client is experiencing cash flow problems.\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They keep promising to pay but take months.\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They don\u2019t see the problem.\u00a0They pay eventually.\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They are a \u201cgood\u201d client and we don\u2019t want to upset them.\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0There is a dispute with the invoice and we haven\u2019t addressed it.\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0The invoice was pre-dated (ie. Back dated […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":255589,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"class_list":["post-255651","page","type-page","status-publish","hentry"],"aioseo_notices":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/pages\/255651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=255651"}],"version-history":[{"count":8,"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/pages\/255651\/revisions"}],"predecessor-version":[{"id":256558,"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/pages\/255651\/revisions\/256558"}],"up":[{"embeddable":true,"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=\/wp\/v2\/pages\/255589"}],"wp:attachment":[{"href":"https:\/\/empoweringaccountants.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=255651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/span>
<\/span>Why?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0The client is experiencing cash flow problems.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They keep promising to pay but take months.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They don\u2019t see the problem.\u00a0They pay eventually.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They are a \u201cgood\u201d client and we don\u2019t want to upset them.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0There is a dispute with the invoice and we haven\u2019t addressed it.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0The invoice was pre-dated (ie. Back dated to month end to reach billing targets).<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They don\u2019t see value in what the firm is invoicing but they haven\u2019t spoken to you about it.<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0They only want to pay once a year.<\/span>
<\/span>
<\/span>And the list goes on.<\/span> <\/span>
<\/span>
<\/span>The bigger question is why are you allowing these clients to dictate your terms of trade?<\/span>
<\/span>
<\/span>Accounting firms are probably the only type of business that allows their clients to pay so long after the goods\/services have been supplied.<\/span>
<\/span>If you go to the doctor, they expect payment when you walk out of the consultation. A mechanic will not hand back your car keys until you pay.\u00a0So why are accountants allowing clients to take their time to pay bills?<\/span>
<\/span>I know that for some clients, there is a policy of no lodgement until payment is made in full.\u00a0And many firms also have monthly payments set up.\u00a0Some firms have a policy of collecting 50% up front before the work is commenced.<\/span>
<\/span>What are we doing about the others?\u00a0Often, we just keep following them up until they decide to finally pay us.<\/span>
<\/span>
<\/span>Why?\u00a0Because our cash flow is pretty good and we are able to carry slow paying clients.<\/span>
<\/span>We are comfortable and not experiencing any pain or financial stress.<\/span>
<\/span>It\u2019s more uncomfortable for us to address the issue with our clients head on than to carry them.<\/span>
<\/span>
<\/span>I understand but there are many reasons that we should address the issue.<\/span>
<\/span>
<\/span>Tomorrow, I will outline the reasons that we should deal with slow paying debtors and why this is important to the future of your firm.<\/span>
<\/span>
<\/span>Why do you think that your clients are slow to pay?<\/span><\/p>\n
<\/span>
<\/span>Often, the frustrated accountant tells me that the client has just bought a new luxury car, has gone on an expensive holiday, has just bought a new house but they aren\u2019t paying their fees.\u00a0Why?<\/span>
<\/span>
<\/span>Because the accountant is letting the client get away with it.\u00a0We want to tell the client that if they have the cash flow for the car, the holiday, the boat, the house, then they should have the cash flow to pay us!\u00a0But we don\u2019t, because it is too hard to have that conversation.\u00a0It\u2019s easier to wait for the client to pay us eventually.<\/span>
<\/span>
<\/span>Addressing the issue is difficult.\u00a0It takes courage and a decision to value yourself and your team.<\/span> <\/span>
<\/span>
<\/span>The best way to act is with baby steps.\u00a0Choose your worst paying client amd have a conversation with the team members working on the job.<\/span>
<\/span>
<\/span>Ask the following questions:<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0What is the yearly fee?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0How long are they taking to pay?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Is the client profitable?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0How long have they been a client?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0How long have they been slow to pay?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Is the situation temporary?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0What reasons do they give?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Do they make a commitment?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Do they honour their commitment?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Is there a problem with their business?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Have we done a cash flow projection?<\/span>
<\/span>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0How much is it costing in time and resources to chase the debt?<\/span>
<\/span>
<\/span>Document the answers and have an honest discussion with your team.<\/span>
<\/span>
<\/span>Decide on a way forward and a strategy for getting paid more promptly.\u00a0Implement the strategy and communicate your decisions with the client and your team.<\/span>
<\/span>
<\/span>Let me know in the comments what your next steps are.<\/span>
<\/span>
<\/span>Good luck!<\/span><\/p>\n
<\/span>
<\/span>Confrontation avoided and decision delayed.\u00a0I know that you don\u2019t have the time to deal with it and you have deadlines to meet. There is no pressing reason to make changes.<\/span>
<\/span>
<\/span>Well, I disagree.\u00a0There are many reasons to take control of your debtors.\u00a0Let me count the ways:<\/span>
<\/span>
<\/span>1.\u00a0\u00a0\u00a0\u00a0\u00a0Debtor days affects the value of your firm.\u00a0You have a good fee base and there is a high demand for accounting firms.\u00a0However, buyers will look at how long it takes for your clients to pay.\u00a0They will use this as a bargaining chip in negotiations, as it is an indicator of a lower quality client base.<\/span>
<\/span>2.\u00a0\u00a0\u00a0\u00a0\u00a0A fee is not a fee until it is collected.\u00a0The repercussions are many.\u00a0Tax and GST paid on uncollected fees, losses from debtor write offs, costs of collection, etc.<\/span>
<\/span>3.\u00a0\u00a0\u00a0\u00a0\u00a0Team motivation suffers, even though they might not say anything.\u00a0The value of their work is undermined when a client takes too long to pay.\u00a0They get frustrated, angry and resentful.\u00a0Your team has busted a gut to help the client, who shows that they don\u2019t value the work done by not paying in a timely manner.<\/span>
<\/span>4.\u00a0\u00a0\u00a0\u00a0\u00a0Senior accountants who are being groomed as the firm\u2019s future partners, start to question whether they want to commit to a firm that allows clients to take so long to pay.<\/span>
<\/span>5.\u00a0\u00a0\u00a0\u00a0\u00a0Like attracts like.\u00a0New clients referred by these slow paying clients will have heard that you carry clients and will expect the same leniency.\u00a0And if you change the rules for them, they will ask why you allow their mates to take their time but you expect prompt payment from them.<\/span>
<\/span>
<\/span>Confrontation is hard.\u00a0Change is hard.\u00a0Losing good staff is hard.<\/span>
<\/span>
<\/span>Choose your hard!<\/span><\/p>\n
<\/span>
<\/span>The following points should be made during this conversation:<\/span>
<\/span>1.\u00a0\u00a0\u00a0\u00a0\u00a0They are a valued client of the firm.<\/span>
<\/span>2.\u00a0\u00a0\u00a0\u00a0\u00a0We\u2019ve noticed that you are taking over 6 months to pay.<\/span>
<\/span>3.\u00a0\u00a0\u00a0\u00a0\u00a0We know that you always pay, however, the payments are well outside our trading terms which are 14 days.\u00a0We are happy to be flexible but 6 months is far too long.<\/span>
<\/span>4.\u00a0\u00a0\u00a0\u00a0\u00a0We have had a huge increase in debtor days throughout the firm, so all partners are in the process of calling all clients who are paying well outside our trading terms.<\/span>
<\/span>5.\u00a0\u00a0\u00a0\u00a0\u00a0If there is a problem, let\u2019s talk about it and come up with a solution together.\u00a0LET THE CLIENT TALK AND YOU TAKE NOTES.<\/span>
<\/span>6.\u00a0\u00a0\u00a0\u00a0\u00a0Give them some options.\u00a0For example, monthly direct debits, fee funding, payments from refunds, prepayments.<\/span>
<\/span>7.\u00a0\u00a0\u00a0\u00a0\u00a0Get a commitment and action it.\u00a0Inform the team.<\/span>
<\/span>
<\/span>Share this with a colleague.<\/span>
<\/span>
<\/span>Contact me if you have any questions.<\/span>
<\/span>
<\/span>Have a great weekend!<\/span>
<\/span>
<\/span>Image courtesy of Freepik.<\/span><\/p>\n