Late invoices are a message

Of the four signals Keepwell reads, invoice timing is the last to move and the easiest to confirm. It is also the one account teams almost never see, because it happens in a part of the agency they do not look at.

The bookkeeper knows that Wexford Realty paid August sixteen days late. The account lead, who is the only person who could do something about it, does not. In most agencies those two people speak once a month, about timesheets.

What a late payment usually means

We went through every retainer in our data that lapsed after an invoice went late for the first time, and asked the agencies what had turned out to be behind it. The answers sort into three groups.

• A new approval step. About four in ten. Someone above your contact now signs off on agency spend. That person did not hire you and has not met you.
• A budget under review. About three in ten. Nothing has been cut yet. Your invoice is sitting in a pile of things being looked at.
• An honest mistake. About three in ten. A change of accounting system, a vacation, a wrong address on file.

So seven times in ten, a first late invoice from a client who has always been on time reflects a real change in how that client is deciding about you. It is worth one question.

Compared with what

As with every signal, the comparison is with the client’s own habit. A client on net-30 terms who pays on day 28 every month is not late on day 29. A client who has paid on day 6 for three years and pays on day 22 has moved by sixteen days, and that is the number in the Monday note, even though both are inside the terms printed on the invoice.

We read the dates, not the amounts. Keepwell needs to know when an invoice was issued and when it was paid. What it was for and how much it came to are optional, and you can switch them off client by client.

How to ask

The mistake is to send a payment reminder. A reminder treats it as a collections problem and goes to accounts payable, who will pay it and tell you nothing.

The better move is for the account lead to mention it, lightly, to their own contact: “I noticed August came through a little later than usual. Has anything changed in how invoices get approved on your side? Happy to send them to someone else if that helps.”

That question does three things. It shows you noticed without making it awkward. It offers to make their life easier. And about four times in ten it gets you the name of the new person who now approves your invoices, which is the most useful thing you can learn about a retainer that renews in six weeks.

A small habit

If you do nothing else, ask your bookkeeper to forward one thing to the account lead: the first late payment from any client who has not been late before. Not every late invoice. Just the first. It takes ten seconds, and it is the cheapest early warning an agency can have.