Late payment can have a significant impact on your cashflow position.
NZ small businesses wait, on average, 24.1 days to be paid after issuing an invoice, according to the most recent Xero Small Business Insights from June 2026. And the average late payment was 4.7 days beyond agreed terms.
That’s nearly a whole working week without receiving the payment you’re due.
What can you do to speed up cash collection and reduce these late payments?
1. Offer a range of payment options and gateways
The easier you make it for customers to pay, the fewer obstacles there are to prompt payment.
Offering a mix of online payment options (like credit cards, Stripe, PayPal or instant digital wallets) directly into digital invoices removes some of the main friction associated with paying on time. Clients can pay immediately, significantly cutting your cash collection times.
2. Switch to e-invoicing
E-invoicing is one of the fastest ways to get your invoices in front of customers.
Switch to e-invoicing using software that’s compatible with the Government-run Peppol network. Sending invoice data straight into your customer's accounting system eliminates manual data entry, reduces billing errors and speeds up approval cycles – getting you paid more quickly.
3. Set up Direct Debits for recurring invoices
For regular recurring invoices, Direct Debit is a great way to automate cash collection.
Once your customer has signed the mandate, automated Direct Debit solutions take funds directly from their account on the due date. This shifts control for payment to you, guaranteeing predictable cashflow without relying on the customer to manually settle the bill.
4. Tighten up your standard payment terms
If repeat offenders are consistently late with payment, it’s worth reviewing and updating your agreed invoice payment terms for specific customers.
Shorten your default terms from 30 days to 7 or 14 days, or request partial upfront deposits for larger jobs. Setting your payment expectations early (and enforcing them) brings cash in faster and creates a buffer against potential payment delays.
If you’re struggling with late-paying customers – and poor cashflow as a result – come and talk to our team about your cash collection.
We’ll review your current cash collection processes and can suggest the most appropriate ways to speed up payment times and bring your cashflow position back under control.
