Why Your Agency Is Bad at Getting Paid (And How to Fix It)

Walk into Tesco. Pick up a loaf of bread. Head for the door and tell the security guard you’ll settle up in 30 days.

See how far you get.

Somehow, in our industry, that is the standard arrangement. The buyer tells the seller when the seller will be paid. We nod along, invoice on net 30 or net 60, and then spend two months wondering where our money is.

Cash is tighter than your P&L is telling you

Gross margins have slipped below 50% across the board. The number I keep seeing quoted is 43%. Pricing is being squeezed as AI commoditises delivery, and lead cycles have stretched because nobody is quite sure what’s coming next.

Which makes profit on paper close to useless. You can’t hire on it. You can’t pivot on it, invest from it, or make any decision that costs money on the strength of a figure your accountant put in a management pack.

Cash in the account is the thing. And agencies are famously bad at getting it there.

Two kinds of client, two versions of the same problem

Either you work with SMEs, where the person approving the invoice is spending their own money. They’re slow. And you feel awkward chasing them, partly because you like them and partly because you had a decent lunch together in April.

Or you work with corporates, where procurement sets the terms before the conversation has even started. That money belongs to nobody in particular. Not one person in that building is losing sleep because your invoice is sitting at day 47.

Different problems. Same outcome. Your cash is in someone else’s account, earning them the interest.

What actually gets you paid

Contracts with clear payment terms, signed. That’s about 5% of the battle. A contract states how you intend to proceed. It doesn’t collect anything.

The work is in the chasing, and specifically in chasing before the due date. If you’re on net 30, someone contacts the client on day 25. “Quick reminder, invoice 1042 falls due on the 30th, our terms are net 30, please make sure it’s scheduled.” That isn’t a chase. It’s a nudge, ahead of the event, and it changes the conversation entirely.

Then take yourself out of the loop. Retainers over projects where the work allows. Direct debit through GoCardless. Card on file through Stripe, billing on a fixed date so that nobody has to remember to raise anything at all.

And delegate the chasing. Your finance person can apply pressure in a way you can’t, because they have no relationship to protect and no lunch to feel awkward about. That leaves you as the last resort. The phone call that means it has got serious.

Set the standard on day one

This is where most of us get it wrong.

We let it slide for six months, then have the difficult conversation. Punishing a client after the fact always lands worse than telling them at the start how it works.

So tell them at onboarding. This is the scope, this is when we invoice, this is when we expect payment, this is what happens if it doesn’t arrive. Nobody is offended by clarity on day one. Everybody is offended by a change of rules in month seven.

And be honest about what you’ll tolerate. The arrangement is meant to be a win on both sides. They get work that makes them money, you get paid for making it. A client who takes the first half and drags their feet on the second isn’t a demanding client. They’re a bad one.

Decide what you’ll accept before you’re in the room with them.

Then have a think about which client on your list has been failing that test for two years while you’ve been telling yourself they’re worth the hassle.