Your profit is real. Your cash is stuck in invoices.
By Andrew Isaacs, CIMA Member in Practice ·
A business can be profitable on paper and empty at the bank, and the difference is usually sitting in unpaid invoices.
Late payment is the norm, not the exception. Around 37 per cent of small firms have run into cash flow difficulties because of it (Federation of Small Businesses), and late payment is estimated to cost the UK economy roughly £11 billion a year. <img class="shot" style="max-width:440px;margin:34px auto 0;display:block" src="/assets/img/blog-your-cash-is-stuck-in-unpaid-invoices-ig.jpg" width="440" loading="lazy" alt="AI Finance Partners infographic, You did the work and raised the invoice. Until it is paid, it does not keep the lights on. Most owners have never measured debtor days."> <p class="shot-cap" style="text-align:center">The numbers behind this.</p>
Debtor days
Debtor days measure how long your money sits with your customers after you have earned it. Most owners have never measured it, so it quietly drifts upward. Every extra day is your money, lent to your client free, often on your overdraft and at your risk.
Work in progress
Cash is tied up even earlier, in work you have done but not yet billed. Billing faster is often the quickest cash win a business has.
The fix
Measure it, then shorten it. Clear terms, prompt invoicing, steady chasing. We show you the number every month and where it is drifting, then help you bring it down. Getting paid is a system, not luck, and we build the system.
Sources: Federation of Small Businesses · GOV.UK, late payments
Andrew Isaacs is a CIMA Member in Practice and Practising Certificate Holder, and the founder of AI Finance Partners, the outsourced finance function for professional services firms turning over £500k to £5m across the South East. Legal cashiering is not part of what we do.