Reduce AR Lag and Reclaim $25K+ in Cash Flow

I was sharing coffee with a woman recently whose business was offering music guided imagination for teams and individuals. “In a world that makes it hard to imagine tomorrow, she helps people gently rediscover their direction, hope, and self.” If that sounds like something you want to explore, let me know and I’ll connect you. She’s delightful. As amazing as that sounds (no pun intended), I don’t have any music in this article and I couldn’t do what she does even if I had to, but regardless of my shortcomings in this arena let’s go on a journey together.

Imagine you worked at a company that paid you once every 3 months.

What would your life look like? What would your actual work be like?

I bet you’d get really good at budgeting. Or you’d be bored, cold, and hungry during the last half of every quarter. How do you think your work would be different? Would you be more or less motivated early on versus later in that window? If you wanted to plan an awesome vacation, invest in the growth of your company, or take a risk … what would that decision making process look like?

Do you see it? See the complexity? The fragility? The sheer tonnage of organization and logistics necessary to manage in a situation like this?

This is what happens when your accounts receivable (AR) terms are Net 90. You can move the numbers around, but the longer it is, the more chaos you create.

For a lot of small service businesses, this is closer to reality than we’d like to admit.

You finish the work. You send the invoice. And then you wait. Sometimes for 15 days. Sometimes 30. Sometimes 45 or more. Meanwhile, payroll still runs. Software renews. A surprise opportunity comes up, but you hesitate—because the money you earned hasn’t landed yet.

This isn’t just a cash flow issue. It’s an opportunity issue. A decision-making issue.

When money trails too far behind the work, your ability to respond gets fuzzy. You lose agility. You make safe choices instead of smart ones. You hold back not because you want to, but because you’re waiting on someone else’s timeline.

And here’s something else: how and when a client pays you is a signal. This goes back to your ideal client considerations and criteria. Do you want to work with people who pay you quickly and without encouragement? Nobody would say “I want to work with people who wait as long as possible to pay me.”

Payment isn’t just a transaction. It’s potentially a reflection of the relationship.

You can design for that. You can set expectations. You can shift your billing rhythm so it supports momentum instead of slowing it down.

That’s exactly what one business owner I spoke to recently decided to do.

A not-so fictional example

I was speaking with an architect recently who told me she used to bill monthly, at the end of each cycle as most architects do. But she noticed some friction. When the money didn’t come as expected, or when a client fell behind, it often took a full cycle or two before she even realized there was a problem. By the time the conversation happened, the gap had grown too wide to ignore, and a ton of work had been done for free.

So she changed her system.

Instead of monthly billing, she moved to bi-weekly. Same rate, smaller invoices, more rhythm.
And when she explained it to clients, she kept it simple:

“If we’re moving too quickly for you, just let us know. We’re happy to slow things down and work on other projects while you catch up.”

You and I both know how many people asked to slow down.

What changed wasn’t just her cash flow. It was her confidence and her ability to be far more proactive. She was able to spot issues earlier. Adjust in real time. And make decisions with the money already in hand instead of wasting time chasing after payment for work done months prior.

The math

Let’s say your business brings in a million dollars in annual revenue. That’s about $83,000 a month.

If your average time-to-payment is 45 days, that means at any given time, you could be sitting on $125,000 in unpaid invoices.

Now imagine you reduce that average to 15 days by moving to bi-weekly billing, setting clearer expectations, or shifting from Net 45 to Net 15.

That shift alone could move $25,000 to $40,000 into your account in a typical month. Not new revenue, money you already earned. Money you can actually use.

But that’s only part of the picture.

With longer billing cycles, it’s easy to go weeks, or even months, before realizing a client is falling behind. And during that time, the work continues. Your team stays engaged. Deadlines move forward.

That’s how you end up delivering $10,000 worth of work on a client who’s already $10,000 behind.

Shorter billing rhythms create more natural checkpoints. You find out sooner when there’s a payment issue, when a client is slowing down, or when a project needs to pause. That clarity helps you refocus your time and team on the work that’s moving forward before you give away hours you can’t recoup.

And all of that adds up.

That insight has value. When your cash is current, your view is clear. You make decisions with confidence. You adjust in real time.

You’re not just improving cash flow. You’re reducing waste. Protecting margin.

What about you?

Think about how your business handles payment right now.

• How long does it usually take to get paid after the work is delivered?
• Do you know what your average payment lag actually is?
• And more importantly… do your payment terms reflect the kind of business you want to run?

You don’t need to overhaul everything. Start by pulling one thread.

Pick a single client or engagement.

Could you move to bi-weekly billing?

Could you send the next invoice a few days earlier?

Could you have a quick conversation about payment rhythm while the project is still going strong?

You’re not trying to squeeze people. You’re trying to design a system that protects the work: yours and theirs.

Because when money flows more predictably, everything gets easier.

A final thought.

You don’t need a more aggressive collections process. You need a system that gives you clarity, consistency, and control without chasing, nudging, or wondering.

If you’d like help spotting the friction points in your billing or payment cycle, let’s do a quick Strategy Session.

It’s free. It’s simple.

And in about twenty minutes, we’ll find one or two ways to tighten your rhythm, reduce your risk, and keep more of what you earn. Let’s make your payment process work as well as the rest of your business does.