Spring's work, still unpaid in September
In March and April you drilled, sprayed and rolled for twenty farms. The fuel was bought, the operators were paid, the tractor finance went out every month. It is September now, and a good share of those invoices is still unpaid. Some customers always pay after harvest. Some are waiting for a grain payment. One said he would pay 'when the single payment comes in' out of habit, years after that stopped being how it works.
Chasing a farmer for money is awkward. They are neighbours, some have been customers for twenty years, and a heavy-handed letter could lose you the work. So chasing happens when you see them at market, or not at all, and the cash sits on their books instead of yours.
Why contractors wait so long to be paid
Farm cash flow is seasonal, and contractors sit at the end of the queue. That will not change completely. But part of the delay is under your control.
- Invoices go out late, because worksheets take weeks to turn into invoices in peak season.
- Payment terms were never agreed, so every customer applies their own.
- Customers receive several small invoices and lose track of what they owe.
- Nobody has a simple list of who owes what and for how long.
- Chasing depends on the boss remembering, and feeling able to raise it.
Payment terms and what you do about late payment are business decisions, and any legal questions are for your adviser. The admin side, knowing who owes what, sending clear statements and chasing consistently, is where a system helps.
What waiting costs
Carrying customers' debt means borrowing to cover your own costs, or delaying paying your own suppliers, which has its own knock-on effects. A contracting business can be busy and profitable on paper and still short of cash in late summer.
There is a knock-on for next season too. A customer who still owes for spring when the autumn work is booked is a harder conversation, and some contractors end up doing more work for their slowest payers simply because nobody looked at the balance before saying yes.
It also costs relationships in both directions. Customers who get a surprise bill for the whole year's work at once find it harder to pay than steady monthly statements. Contractors who chase inconsistently end up treating customers differently, which customers notice.
Clear statements, recorded terms and consistent chasing
What we build is a customer account view for a contracting business, with statements and chasing designed for farm customers.
- Invoices go out soon after work is done, from job records priced from your rate card, so nothing waits for month end.
- Each customer has payment terms you agree with them recorded: monthly, quarterly, after harvest by a set date, or by a payment plan. Where a customer has agreed to pay after harvest, the chasing waits for that date.
- Customers get a monthly statement listing each job, invoice and payment, so they see one balance, not a pile of invoices.
- A list shows every customer's balance, how much is past their agreed terms and for how long.
- Reminders are sent on a schedule you choose, worded as you want: a friendly note first, a statement second, and a personal call from you flagged for anything older.
- Payments are matched from your bank feed in Xero, QuickBooks or Sage. Customers can pay by bank transfer, or by card or direct debit through a payment provider such as GoCardless or Stripe if you want to offer it.
| Customer type | Agreed arrangement | What the system does |
|---|---|---|
| Pays monthly | Monthly terms | Statement monthly, reminder when past terms |
| Pays after harvest | Agreed date after harvest | Statement monthly, no chasing until the date |
| Payment plan | Instalments by direct debit | Collects and records instalments |
| Occasional customer | Standard terms | Invoice and reminder schedule |
September with a clear list
In September you open the customer list. Most after-harvest customers are within their agreed dates. Three customers are past their terms by more than a month; one has had two reminders, and the system has flagged him for a personal call. You ring him from the tractor. The monthly statements that went out through the summer mean nobody is surprised by the balance.
In spring, two regular customers agree to pay by monthly direct debit, which evens out both your cash flow and theirs.
Is your cash sitting on customers' books?
- Spring's work is still unpaid by late summer.
- Payment terms were never agreed with most customers.
- Invoices go out weeks after the work.
- Chasing depends on you remembering and seeing people at market.
- You do not have one list of who owes what and for how long.