The Real Cost of Late Invoicing:A 15-Month Invoice Case Study
- Pippa Dones
- Nov 19
- 2 min read
When Bills Come Back to Haunt You
Last week, one of my clients received an invoice that made their stomach drop. It was for repair and maintenance work completed 15 months ago – work they'd completely forgotten about because no invoice ever arrived.
The amount? Significant enough to throw their entire monthly budget off track.
This isn't just about one unexpected bill. It's about the ripple effects that poor invoicing systems create throughout your business finances.
The Hidden Costs of Late Invoicing
When invoices arrive months after work is completed, the damage goes far beyond the dollar amount:
Cash Flow Chaos: That money should have been allocated and spent 15 months ago. Now it's competing with current expenses, creating an artificial cash crunch that could have been avoided.
Budget Breakdown: Your financial planning becomes meaningless when surprise expenses can pop up at any time. How do you plan for growth when you don't know what you actually owe?
Relationship Strain: Late invoices create tension between businesses. My client questioned whether the work was even completed properly – it was so long ago, who remembers the details?
Tax Complications: Expenses from previous financial years can complicate your tax returns and affect your GST claims timing.
The Other Side of the Coin
If you're the business sending late invoices, you're hurting yourself, too.
Cash flow suffers while you wait to bill completed work
Clients may dispute charges they don't remember authorising
Your credibility takes a hit when invoices arrive months late
You're essentially providing free financing to your customers
Simple Systems That Prevent Invoice Disasters
The good news? This is entirely preventable with proper systems:
Invoice Immediately: Bill within 7 days of completing work, while details are fresh in everyone's mind.
Use Project Management Tools: Track what's been completed and what needs invoicing. Don't rely on memory.
Set Payment Terms: Clear terms (like "payment due within 30 days") create expectations for both parties.
Follow Up Consistently: If an invoice goes unpaid, follow up promptly rather than letting it slide.
Keep Detailed Records: Document what work was done and when, so late disputes can be resolved quickly.
Your Financial Health Check
When was the last time you reviewed your invoicing process? If you're regularly surprised by unexpected bills – or if you have work sitting unbilled – it's time for a system upgrade.
Your bookkeeping should give you confidence in your financial position, not leave you vulnerable to surprise expenses that throw your entire month off track.
Need help setting up systems that keep your finances predictable and your cash flow healthy? Let's chat about creating invoicing processes that work for your business.
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