Accounts Receivable
You delivered the work. The invoice went out. The client hasn't paid. That money—owed to you for work already done—is accounts receivable (AR). High AR means cash is stuck with clients instead of in your account. You're still paying expenses, payroll, and tools; cash flow gets tight even when revenue "on paper" looks fine. Reducing AR (faster payment, clear terms, reminders) keeps money moving.
Same revenue, different timing. Two consultants each have $80k in signed work this quarter. One invoices at project end and waits 30–45 days for payment; the other invoices in milestones and uses invoicing automation for reminders. The second has cash when they need it; the first is constantly chasing and sometimes delaying payables. AR is a timing problem. Shorter payment terms and consistent follow-up turn receivables into cash.
Get paid sooner. Automate the ask. Don't fund your clients' float with your own cash flow.
How to reduce AR
Clear terms upfront. Net 15 or net 30, stated in the contract and on the invoice. Payment due on receipt if you can get it. The clearer the terms, the fewer "I didn't know" excuses.
Invoice in milestones. Don't wait until the end of a 3-month project to send one big invoice. Bill at kickoff, at midpoint, at delivery. You get cash earlier and reduce the size of any single outstanding balance.
Automate reminders. Use your billing tool to send a reminder at 7 days before due, at due date, and at 7 days past. Many late payments are forgetfulness, not refusal. Workflow automation for invoicing and follow-up cuts manual chasing.