Improving Fee Collection and Cashflow

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Improving Fee Collection and Cashflow

• 30 June 2026
• Business Advisory
• Tamryn Dicks

Sales are vanity, profit is sanity, but cash is king.

It’s a popular saying, you have almost certainly heard it before. Is it true?

A practice that isn’t making any sales will fold. A practice that doesn’t bring in more sales than it costs to run (i.e. make a profit, will fold…. But…. sales and profit are accounting numbers, on financial reports - no matter how important they are to your business, at the end of the day, if your customers don’t physically pay you, those numbers mean nothing.

You need to actually have cash in your bank account in order for your practice to survive. And that makes cash management one of the most important jobs you have as a practice owner. Not tax returns. Tax returns make you sales, but cash management is going to keep you in business.

82% of business failures are due to poor cash management. 79% of business failures are a result of just simply running out of funds. This applies to tax and accounting practices just as strongly as it applies to your clients.

There is no specific dataset that directly measures debt collection issues for South African practices, however, we can use SARS debt trends and industry commentary to prove that accountants and tax practitioners are increasing dealing with client non-payment and growing debtors books.

Accounting Weekly notes that “taxpayers are struggling to keep up” with their SARS debts – and if they can’t pay SARS, arguably their most important creditor, then where does that leave you?

Getting paid is your first and most important step in managing your cash. Despite this, 54% of business owners battle to get paid on time and 40% of business owners do not chase payments at all because they are scared it will damage the relationship they have with their clients. However, South Africa is currently facing a debt collection problem. 47% of South African SME’s are being affected by late payments and the average delay is currently 61 days.

If you do not have a system in place to actively collect payments from your clients – who are already under tremendous pressure to pay multiple other debtors – then you are not going to get paid. It’s that simple.

You cannot survive as a business if it takes this long to get your cash in – if you are facing payment days like this, you need to fix it. I fully understand not wanting to chase clients for payment, its awkward and it can be unpleasant and none of us want to do it. But we need to.

The good news, is that it doesn’t have to be awkward and unpleasant – not if we set things up correctly.

There are two major reasons why people don’t pay on time:

1. We didn’t establish the requirements upfront (in other words, we didn’t actually tell our clients what our terms are or – and especially in the case of big business – we didn’t find out if they have specific requirements on their side. Many large corporates need you to supply invoices in specific formats or to be submitted according to strict timelines. If you don’t find out and meet those requirements, they won’t pay)
2. Simple forgetfulness (sometimes they didn’t get the invoice because you forgot to send it, often they forget about it and you aren’t reminding them because you feel bad to)

Very few people actively avoid paying their debts. This means that most of your late payments are a result of one of these two things - and that’s great news - because it means we can fix them.

A simple fee collection process should remove these issues for you, while also removing the awkwardness and unpleasantness normally involved in phoning a client for payment.

And a good fee collection process covers all of the following:

• Quoting
• Invoicing
• Reminders
• Collection
• Legal action

Fee collection begins long before you issue an invoice. Do yourself a favour, and go and get official terms & conditions drawn up for your firm by a lawyer. Yes, you can download a template off the internet – don’t. Get yourself proper and very clear terms and conditions. It costs money, but it costs you far, far, far more when a client refuses to pay or – worse – sues you because you didn’t lay out your terms and conditions correctly.

So get official terms & conditions created that cover everything from when you begin the job, to what you need to complete the job, to how you will deliver, to when it is considered done and – the most important bit – how you will get paid.

Be sure that you very carefully lay out what is your responsibility, and what is not and what you need clients to do or provide in order for you to meet your responsibility. Do not give them a reason to be able to question your work or refuse a payment on a technicality. Cover the technicalities here.

When you are quoting a client, be sure to send them your terms and conditions and make sure that they understand them before they accept the quote. Preferably, get them to sign it.

Then you turn your thoughts to invoicing.

First and foremost: ask if they have specific invoicing requirements. 61% of bad collections are simply because the invoice does not meet specified requirements. Before creating an invoice, have a checklist for yourself to make sure you have met the legal requirements of your jurisdiction, and the specific requirements of your client (if you work with corporations). Bigger companies require specific references, names and supporting documents – find out what they need and make sure they get them on your invoice.

Then, make sure you have a way of tracking what you have – and have not – invoiced. Particularly if you are charging in phases, and if your client has specified timelines for sending invoices and reminders! Add those dates to your calendar and your checklists. You will not get paid if you are the one who completely forgets to invoice the client in the first place!

Ideally, do your invoicing in cloud accounting software. Not only does it ensure that your invoices are in the correct legal format and that you don’t duplicate your invoice numbers, but it also gives you the ability to do things like set up automatically recurring invoices, or to create your invoices ahead of time and set them to send automatically on those dates.  

All of the above has taken care of the first reason people don’t pay: You have clarified all expectations upfront.

At this point, both you and the client are 100% on the same page regarding how much they are paying you and when they are supposed to pay. And you have all these important dates locked and loaded on your calendar, so that you will not forget to send the invoice. Now there is no room for argument or misunderstanding.

So now we deal with the other big reason for late payments. The fact that people forget.

Handling this problem is the simplest thing in the world. You just simply need a reminder system. You need to have a system in place that dictates when you remind a client, how often you remind a client and at what point you stop being friendly.

You want to send friendly reminders a few days before the due date, on the due date and – if they have not paid – a few days after the due date. Your reminders should become firmer when you have gone more than 7 days past the due date and friendliness should disappear completely after two weeks.

You need to decide, now, ahead of time, when you will hand an unpaid account over for debt collection, so that you can warn them a few days before it happens.

Side note here: make it easy for your clients to pay you.

Make sure your bank details are on the invoice and the reminders. Preferably, offer them more than one way to pay. So have a payment gateway that offers EFT, instant EFT and credit card – if you can. Preferably have a “pay now” button or link on your reminders. The easier it is to pay immediately, the more likely it is that your client will pay the second they see the reminder.

Most people will pay after the first reminder and a few overwhelmed and busy ones will pay after the third. It is actually extremely rare that people don’t respond to an interest warning or a legal-action warning.

This is an uncomfortable part of business ownership and collections are often ignored by business owners because they are unpleasant and they don’t want to ruin the relationship with the client. It’s made harder at the moment because at the moment, the whole world is taking strain and nearly everyone has cashflow issues and if you are even slightly soft hearted you will feel bad for your clients when they say they can’t pay you. I know it’s hard.

But you need to remember that they came to you for a service, which you provided at a rate that they agreed to.

But: if you have gone out of your way to do all of the elements above, then it is 100% your client who is in the wrong if they are not paying you. They were not doing you a favour by using your services. They needed the service, you quoted and they agreed. You are not a bank. It is not your job to fund your clients’ businesses. It is your job to keep them compliant and to prevent them from getting into trouble with SARS.

And if you do follow all of the steps above, then they knew your fee, understood your process, they knew your payment terms and they agreed to it all before you started the job. So now the onus is on them to pay the invoice. If they don’t, then they are actually committing business fraud – they knowingly engaged you while not being able to pay you. Yu can give them grace, send them reminders, and be friendly, but when that does not work, hand them over. You are doing the right thing, do not feel guilty about it!

So put your system in place and have your email templates already written and ready for you to use ahead of time. If you have a system with set timing and set wording, then you don’t have to think about it and you don’t have to feel bad every time. You just set reminders in your calendar and you copy and paste and send.

Managing collections effectively can make a significant difference to the financial stability of your practice. To learn more practical approaches to improving fee collection and cashflow management, register for our webinar, click here.

However you do it, make sure you do have a system of reminders and warnings because I promise you that they will improve your collections by up to 42% (even without handing anyone over for legal action!)

Which will have a VERY positive effect on your cashflow.

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