How to reduce debtor days with automated payment chasing

Cash flow is the lifeblood of any small firm, yet professional services businesses routinely struggle with one of the most fundamental aspects of financial health: getting paid on time. Debtor days — the average number of days it takes to collect payment after invoicing — is the metric that quantifies this problem. For many small accountancy practices, legal firms, and consultancies, debtor days sit well above where they should be, quietly draining working capital and creating unnecessary financial stress.

Why debtor days matter

The concept is simple. If your average debtor days figure is 45, it means you are waiting, on average, 45 days from the date you issue an invoice to the date you receive payment. During that period, you have already incurred the costs of delivering the work — staff time, overheads, software, office space — but you have not yet been compensated for it. The longer the gap, the more working capital you need to keep the business running.

For a small firm, the impact is disproportionate. A large corporation can absorb the cash flow fluctuations caused by slow-paying clients. A five-person accountancy practice cannot. High debtor days mean delayed salary payments, deferred investment, reliance on overdraft facilities, and the constant background anxiety of not knowing whether there will be enough in the account to cover next month's obligations.

Why manual chasing does not work

Most small firms handle payment chasing manually. Someone — often a partner or office manager — reviews the aged debtors report, identifies overdue invoices, and sends reminder emails or makes phone calls. This approach has several problems.

First, it is inconsistent. When the firm is busy with client work, chasing falls down the priority list. The irony is that the busiest periods — when the most work is being delivered and the most invoices are being issued — are also the periods when chasing is most neglected.

Second, it is uncomfortable. Many professionals dislike chasing clients for money. It feels at odds with the advisory relationship they have built. The result is that reminders are delayed, softened to the point of ineffectiveness, or simply not sent at all. Outstanding invoices drift from 30 days to 60, from 60 to 90, and eventually into the territory where collection becomes genuinely difficult.

Third, it is time-consuming. Each overdue invoice requires checking the status, reviewing any previous correspondence, composing an appropriate message, and recording the follow-up. Multiply this across dozens of overdue invoices and the time commitment becomes significant.

The automated approach

Automated payment chasing removes the inconsistency, the discomfort, and the time burden by systematising the entire process. It works by monitoring invoice due dates and triggering a sequence of communications at predefined intervals.

A typical sequence might look like this. A few days before the invoice is due, the client receives a courtesy reminder with a link to pay online. On the due date, if payment has not been received, a polite follow-up is sent. A week after the due date, a firmer reminder goes out. At 14 days overdue, the tone escalates slightly. At 30 days, the communication becomes more formal and may reference the firm's terms of business. Each message is professionally worded, appropriately timed, and sent without anyone needing to remember to do it.

The key word is “sequence.” Rather than a single reminder that is easy to ignore, automated chasing creates a persistent, escalating series of touchpoints that makes it progressively harder for a client to overlook an unpaid invoice. It is polite but relentless — exactly the combination that produces results.

Protecting the client relationship

The most common objection to automated payment chasing is concern about the client relationship. Will clients feel harassed? Will automated messages feel impersonal? These are valid concerns, and the answer lies in the implementation.

Well-designed chasing sequences use the firm's own branding and tone of voice. The messages should read as if they came from a real person at the firm, because from the client's perspective, they did. Early reminders are helpful and friendly — a gentle nudge, not a demand. The escalation is gradual and always professional.

In practice, most clients appreciate clear, consistent communication about their account. The alternative — silence followed by an awkward phone call weeks after the due date — is far more damaging to the relationship than a well-timed automated reminder.

Best practices for reducing debtor days

Automation is the most impactful change, but it works best as part of a broader approach to getting paid faster. Invoice promptly — every day of delay between completing work and issuing the invoice is a day added to your debtor days. Make it easy to pay by offering multiple payment methods and including a direct payment link in every invoice and reminder. Set clear payment terms upfront, ideally in the engagement letter, so clients know what to expect.

Consider requesting payment on account for larger engagements. Bill in stages rather than in a single lump sum at the end of a project. And track your debtor days as a key performance metric, reviewing it monthly and investigating any upward trends before they become entrenched.

The firms that maintain healthy cash flow are not necessarily the ones with the most accommodating clients. They are the ones with the most effective systems. Automated payment chasing is the cornerstone of those systems, and for many small firms, it is the single change that makes the biggest difference to their financial health.