Can we talk about how switching our payment terms changed our cash flow?

We moved from net 60 to net 30 for all our agency clients about 6 months ago. At first I was worried they'd push back, but our average collection time dropped from 52 days to 28 days. Has anyone else seen a big difference from just tightening up their billing terms?

3 comments

3 Comments

blairc901d agoMost Upvoted

Was there any client pushback at all? That's a huge change in terms. I'm not surprised your cash flow got better, that's a lot of money coming in twice as fast. We tried moving to net 15 once and lost a couple of smaller clients over it. Net 30 seems like a solid middle ground that most professional clients will accept.

leewalker1d ago

Honestly, blairc90 makes a really good point about the pushback. Tbh, we did get some serious grumbling when we first switched, mostly from the older clients who were used to the old way. It felt like pulling teeth for a few months, no lie. We held firm though, and honestly, the ones who left were the same ones who were always late paying anyway. The good clients adjusted after a cycle or two. Now it just feels normal, and chasing payments takes up way less of my week.

willowg881d ago

Yeah that whole pushback thing is so real lol. We had one guy who used to mail a paper check every single month, like clockwork, but two weeks late. When we switched to auto-pay he called it "highway robbery" and quit. Honestly, good riddance, he was a pain to deal with anyway.