Clients Ghosting Your Invoices?

We are about to start a new week, are you ready?!

In 2025, collection issues have become a serious pain point for small businesses. With inflation stabilizing but not reversing, and operating costs still high, many small business owners are struggling to get paid on time. This isn’t just a frustration, it’s a cash flow killer. Delayed receivables are putting pressure on day-to-day operations, hiring plans, and vendor relationships.

The data paints a troubling picture. According to the QuickBooks Small Business Report (Q2 2025), 56% of small businesses say overdue invoices have increased in the past year which is up from 43% in 2023. The reasons have varied, but here’s what’s making collections harder this year for many:

• Extended payment terms becoming the norm (clients stretching net-30 into 45–60 days). Why are we doing this? Does it benefit you?

• Tighter lending conditions making clients more protective of their cash

• Larger companies slowing payments to maintain their own liquidity, hurting those small businesses.

• Less customer loyalty, making follow-up collections more awkward for many and others don’t value partnerships the same.

The consequences of late payments are hitting hard you all. The National Federation of Independent Business reports that nearly 1 in 3 small businesses say they’ve had difficulty meeting payroll or vendor obligations because of unpaid invoices. In fact, 48% say they’ve had to dip into personal savings to stay afloat. Many also are selling their receivables to factoring companies just to meet payroll!

Certain sectors are more vulnerable than others, particularly service providers like marketing consultants, creative freelancers, and tradespeople who rely on milestone or post-project billing.

In response, many small businesses are adapting their invoicing and collection processes. Common tactics being used in 2025 that we are seeing include:

• Requiring upfront deposits or payment milestones (prepay/cod)

• Automating invoicing and payment reminders to reduce human follow-up (ya’ll need to do this anyway!)

• Offering small discounts for early payments (e.g., 2% off if paid within 10 days) This must make sense though…

• Bringing in third-party collection support earlier in the cycle at a small cost

• Adding late fees or interest for overdue payments. I never understand why businesses don’t do this!

Automation, in particular, is proving powerful as others are catching on that AI/Automation can be very helpful. Businesses using platforms like QuickBooks, FreshBooks, or Zoho Invoice report up to a 45% reduction in overdue payments due to automated reminders and faster invoice generation (QuickBooks Data Lab, 2024).

The collection issue isn’t just about unpaid invoices, but it’s about how long your business can operate with frozen cash. The small businesses that are rethinking their collections process now will be the ones that weather the next downturn later.

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