Agree payment terms before the work, send a complete invoice when it is due, and follow a fixed reminder schedule. These steps reduce delays you can control, though payment still depends on the customer. Follow the €24,000 example below to see where 67 days passed between delivery and cash.
Here is one invoice followed from the contract to the bank, with the days it lost and what would have saved them.
The invoice
A €24,000 invoice on 30-day terms was paid 67 days after delivery, and only the last 19 days were the customer being late. The startup in the example has €150,000 in the bank and a net burn of €25,000 a month (six months of runway), and it sold a €24,000 implementation project to a mid-size customer on 30-day terms.
What actually happened:
| Day | What happened | Days lost |
|---|---|---|
| 0 | Work delivered | |
| 9 | Invoice sent, after the founder got round to it | 9 |
| 16 | Customer's accounts team rejects it: no purchase order number | 7 |
| 18 | Corrected invoice sent; the 30 days restart from here | 2 |
| 48 | Due date passes. Nobody notices for a week | |
| 55 | First "just checking in" email | 7 |
| 67 | Paid |
The customer paid 67 days after delivery on terms that said 30. Only the last 19 days were the customer being late. The first 18 were the seller's.
For six weeks, €24,000 that the founder had mentally banked was not in the account. At a €25,000 burn, that is almost a month of runway sitting in someone else's approval queue.
How do you agree payment terms before the work?
Agree payment terms once, before the work, by putting them in the proposal or contract as well as on the invoice: the due date, what interest applies if it is late, and that work pauses if payment stops. A customer who signs "30 days, then work pauses" has had the awkward conversation already, at the moment it was easiest.
Ask for part of the fee up front on project work. With 40% on signature, €9,600 of this invoice would have been in the bank before the work started, and the late part would have been €14,400.
If you run an agency or a retainer business, the same applies to the retainer: invoice it at the start of the month it covers, not at the end.
Ask the customer's accounts team one question before you invoice: what does an invoice need to be approved first time? Purchase order numbers, the exact legal entity, a named approver. Those seven days lost to a rejected invoice were avoidable with one email in advance.
When should you send the invoice?
Send the invoice on the day you deliver, because the payment clock usually starts from the invoice, not the delivery. Under the EU Late Payment Directive, when a contract sets no date, payment is due 30 calendar days after the customer receives the invoice (Directive 2011/7/EU, Article 3). UK law works the same way when no date is agreed (GOV.UK, when a payment becomes late).
Every day between delivering and invoicing is a day of credit you gave away. In the example, invoicing on day 0 alone would have moved the due date nine days earlier.
How often should you remind a customer to pay?
Remind a customer on a fixed schedule that runs whatever your mood or bank balance: three days before the due date, on the due date, 7 days late, and 14 days late, when work pauses as the contract says. Decide the schedule once and let it run:
| When | What you send |
|---|---|
| 3 days before the due date | A friendly note with the invoice attached again |
| On the due date | A short reminder with the payment details at the top |
| 7 days late | A direct note stating the interest now accruing, in euros |
| 14 days late | Work pauses, as the contract says |
A fixed schedule teaches the customer's accounts team that your invoices do not slide, and that is the reputation you want in their queue.
What can you charge when a customer pays late?
In the EU, a business customer who pays late owes statutory interest of at least the European Central Bank's reference rate plus eight percentage points, plus a fixed €40 for recovery costs, without any reminder needed (Directive 2011/7/EU, Articles 2 and 6).
Check the applicable national rate before adding a charge. For euro-area reference rates, see ECB key interest rates. The calculation below uses an illustrative 10.40% annual rate rather than a claim about today's statutory rate.
For this invoice, 19 days late:
interest = amount x annual rate x days late / 365
= 24,000 x 0.104 x 19 / 365
= 129.93 euros, plus the fixed 40 euros
In the UK, statutory interest is 8% plus the Bank of England base rate, and you can add a fixed £40, £70 or £100 depending on the size of the debt (GOV.UK, charging interest). Check the current Bank of England base rate before calculating the charge.
About €170 will not change your runway. Naming it in the 7-day reminder changes how fast the invoice moves, because it tells the accounts team that yours is the one that costs money to leave at the bottom of the pile. The late payment interest calculator gives you the figure per day and to date.
The mistake: counting it before it lands
Counting an invoice as cash before it lands makes your runway look longer than it is. The founder in the example treated the €24,000 as received on the day the invoice went out. Their runway looked like seven months while the cash in the bank said six, and a hiring decision was made in that gap.
Put an expected payment date on every open invoice, and only count the money as cash when it arrives.
In Plainhub, each customer carries an expected payment date. When the date passes without the payment being marked as received, the row turns red, shows how many days late it is, and an alert names the amount outstanding. A customer marked Expected stays out of MRR until you mark the payment received. A late date alone does not remove an Active customer from MRR, so review status when your revenue assumption changes. Once the money lands, you mark it paid and the next payment date moves on.
If you are still choosing what terms to offer in the first place, what net 30 means works through what 30, 60 or end-of-month terms cost you in cash.