What's worse Than Not Getting Paid?
Paying tax on money you haven’t even received. That’s exactly what happened to one of our clients.
He’d completed the work. Sent the invoices.
Over $200,000 technically “earned” — but none of it was in his bank account.
This wasn’t a profitability problem.
It was a cashflow crisis.
When “Good Clients” Don’t Pay
Some invoices were 90 days overdue. Others? Over a year old.
The automated Xero invoice reminders had stopped long ago.
Clients were enjoying the work… but there were no nudges to pay.
And manual chasing? That wasn’t happening either.
“It feels awkward. I hate confrontation. I don’t want to have to go over every little detail when I know they’re just trying to screw me down. I just don’t want to deal with it.” And fair enough — most business owners didn’t start their business to become debt collectors.
The Hidden Cost of Avoiding the Awkward Conversations
Here’s the reality:
There’s nothing awkward about being paid for work you’ve already done.
What’s truly awkward is watching clients enjoy the value you’ve delivered…
while you scramble to pay your tax bill, delay supplier payments, and risk damaging your reputation as a business owner.
In this case, my client had already paid tax on that “income” — money that was still sitting in someone else’s bank account.
Why This Happens So Often
This is one of the most common — and costly — issues we see.
You’re busy. You’re profitable.
But there’s no cash.
And it almost always comes down to one thing: no debtor management system.
The $200K Recovery Plan
Here’s how we turned it around:
1. Tightened the Terms
We moved payment terms to 7 days. No debate, no delay.
2. Created a Clear Collection Policy
We set a process with an escalation point — if payment isn’t made, it goes straight to collections. No ifs, buts, or maybes.
3. Set Up Smarter Follow-Ups
We created a branded email reminder template in Xero that made it quick and easy to chase overdue invoices — without awkward wording or guesswork. Not fully automated, but fast and effective.
4. Tackled the Biggest Debtors Personally
Where most accountants would step back, I rolled up my sleeves. I sat down with the two biggest debtors, met with their teams, and negotiated full repayment plans — without discounting a cent.
The Results
Close to $200,000 recovered from just two clients
Cashflow stabilised
Tax paid
Team and suppliers looked after All without discounts, stress, or drawn-out disputes.
The Takeaway
If you’re showing a profit but constantly feeling broke, your debtor system is broken. The fix isn’t complicated — but it does require a process, clear boundaries, and sometimes a little hands-on negotiation. Need help getting your cashflow back on track? 👉 Book a free 15-minute consultation.
No pressure. Just a real plan to get your cash flowing again. Book a free Consultation
