Winning new clients is important for any agency. But once the work has been delivered, there’s another question that can have a major impact on your business: when will you actually get paid?

Agencies can often have significant costs to cover while waiting for client payments. Salaries, freelancers, software and other overheads don’t stop simply because an invoice hasn’t been paid yet.

Understanding a client’s payment behaviour can be an important part of protecting your agency’s cash flow.

What is Good Business Pays?

Good Business Pays is a campaign focused on improving payment practices and tackling the issue of slow and late payments.

The platform provides information about the payment performance of larger businesses, helping smaller businesses gain greater visibility into how quickly companies pay their suppliers.

For agencies, this can provide useful information when considering new clients and managing the financial risks that can come with taking on larger projects.

Why does payment behaviour matter?

When deciding whether to work with a new client, agencies will usually consider factors such as the budget, the scope of work and whether the relationship is a good fit.

But payment behaviour can be just as important.

A client may have an exciting project and a healthy budget, but if they regularly take a long time to pay suppliers, this could put pressure on your agency’s cash flow, particularly if you have already committed time and resources to delivering the work.

Having an idea of a client’s payment performance gives you another factor to consider before entering into the relationship.

Use the information to plan ahead

Understanding how a client typically pays doesn’t necessarily mean deciding not to work with them.

Instead, it can help you plan for the relationship and put the right payment arrangements in place from the start.

Depending on the project, you may want to consider:

• Requesting an upfront deposit
• Agreeing payments at key project milestones
• Reviewing your payment terms
• Factoring expected payment times into your cash flow forecasts

These conversations are generally much easier to have before work begins than when an invoice is already overdue.

Choosing the right clients for your agency

As your agency grows, deciding which opportunities to pursue becomes increasingly important.

Looking at payment behaviour alongside factors such as profitability, workload and the long-term potential of a client can help you build a fuller picture of whether an opportunity is right for your business.

It also gives you the chance to identify potential risks early and make informed decisions about where to invest your team’s time and resources.

Don’t wait until payment becomes a problem

Late payments can take up valuable time and energy. Chasing invoices, following up with clients and managing the impact on cash flow can all become a distraction from running and growing your agency.

Being proactive can help reduce some of this risk. Checking payment behaviour before taking on work, agreeing clear payment terms and having an effective credit control process in place can all help you stay on top of your cash flow.

How can we help?

Managing unpaid invoices and chasing late payments can be time-consuming, particularly when you’re already focused on running your business and delivering work for your clients.

As well as supporting businesses with their wider financial needs, we can also provide credit control services to help you manage your sales ledger, follow up outstanding invoices and improve your cash flow.

If you’d like to find out more about how we can help with your credit control, please get in touch with our team.