Cash flow · Practical business lessons
Before chasing more sales,
check what hasn’t been invoiced.
By Jamie Cottle, founder of Fettle Advisory. A practical lesson from running a vehicle-hire business.
Use the five-job check.
Enter your dates in the free invoicing delay tool to calculate the gap and identify work still waiting to be billed. You can print your results, with no email sign-up.
The delay before the payment clock starts.
Owners can be busy winning work while completed jobs sit waiting to be invoiced. The work is done, but the next step has no clear owner, needs information from another team or gets pushed behind an easier job.
What I found in a vehicle-hire business.
In one example from my own business experience, longer, more complex hires were being left while straightforward short hires were invoiced. The time from off-hire to invoice fell from 27 days to two after attention was given to that process.
That is a reduction in the time taken to raise an invoice. It does not mean customers paid within two days. Payments came in quicker, but I do not have a verified figure for cash released. This is historical operating experience, not a Fettle client case study.
Try this with five jobs.
- Pick five completed jobs, including at least one complicated job.
- Record when each job finished and when its invoice went out.
- For any gap, write down what held it up and who could resolve it.
- Record the payment terms, due date and actual payment date separately.
- Agree one change and review the next five jobs to see whether it helped.
Measure the right thing.
Track completion-to-invoice time separately from invoice-to-payment time. Otherwise an improvement in your process can be hidden by a customer paying late, or a fast-paying customer can disguise a slow invoicing process.
For contract terms where the due date runs from invoice receipt, sending an accurate invoice sooner starts that clock sooner. It still needs to reach the right person, with the information they need to approve it.
The commercial lesson.
Before investing in more sales activity, check how effectively the business turns its existing work into cash. A useful first step is often finding the delay you can control.
Explore cash flow support or use the free Business Health Check to reflect on the wider business.
Talk through your next step.
Start with a free 15-minute conversation with Jamie. We’ll discuss the issue and whether a review, ongoing support or a defined project would be useful.
Request a free conversation