This Podcast Is Episode Number 464, And It's About Solutions To Reduce Debtor Days For Construction Business Owners   Steady, reliable cash flow is crucial for the survival of your construction business – so taking steps to ensure your customers pay promptly is a key priority.   Debtor days refer to the length of time it takes clients, on average, to pay you for the work you've done. A higher number of debtor days means clients take longer to pay you. A lower number of debtor days means clients take less time to pay you, which means there's more cash available for your business to use.    In the construction industry, debtor days can average as long as almost three months. Shortening that length can have a significant impact on your cash flow.   When your clients consistently pay on time, you'll avoid the dreaded "feast or famine" cycle. You'll be able to pay your vendors, suppliers, and employees on time, and, not least of all, yourself. Additionally, if clients start taking too long to pay you, you may leave money on the table in exchange for collecting anything at all.  Implement these nine tips to get paid without delay. 1. Provide payment terms upfront Before working with any new client, always provide your terms in writing. Clearly state your rates, due payment dates, and your policies regarding late payments – including any fees you'll charge on balances owing. Make sure your client signs the agreement indicating that they are aware of your terms and conditions. Don't work with any client who refuses to sign.  2. Understand your client's payment process Large clients may have lengthy payment processes that require invoice verification. They may also receive dozens, or even hundreds, of invoices regularly. As a result, their policy may be to pay invoices only on certain days or only after so many days have passed from receiving the invoice. If possible, submit your invoices with their payment cycle in mind. If they only pay on the 15 of the month, get your invoice in before that date so that you can get paid this month instead of following. Make sure your invoices have all the information your client needs to quickly and efficiently verify your invoice. Have a checklist of all the information to include so they can approve it without coming back to you with questions.  3. Invoice immediately Invoice as quickly as you can. Every day you wait to send an invoice is another day you'll wait to be paid. If your invoice is on completion of a project, have your invoice ready to go by the final day so that you can send it right away. If you're currently preparing your invoices manually, switch to an accounting system with automated billing. You'll never forget to invoice a client, and you'll eliminate errors. You'll also be able to see when the invoice was sent, whom it was sent to, and when they viewed the invoice.   4. Follow up on invoices Send an invoice reminder before payment is due. People forget about their invoices, or invoices get misplaced, and a simple reminder can go a long way to helping clients remember. Call your customer immediately when a payment is past due. Ask for the invoice status and anything you can do to speed up payment. Sometimes a simple change, like including a purchase order number on the invoice, can speed up processing times. 5. Reward early payers Consider offering clients a 2% discount when they pay their invoice within ten days. In this scenario, a $1000 invoice would be reduced to $980 – not a massive loss for you, but an attractive cash-saving incentive for your customers. It can be worth it if it frees up cash for your business.  6. Charge interest As part of your terms, specify that if a client's payment is past due, a weekly fee of 2% will be added to the total until funds are received in full. If the client goes past due, charge them interest. 7. Get paid upfront In our past construction business, one of our fail-proof...