Do you get paid on time?

We were sitting on over $1M of unbilled revenue and we had another $1M+ of past due receivables. Cash is always tight in software businesses. Whether you need free cash flow to invest in a new product, expand the team or pay down debt, cash is king. Getting paid on time by your customers is getting more complex by the day, especially if your customers are large multi-national publicly traded businesses. They have complex procurement processes and software that you need to adopt in order to get paid at all, much less on time.

However, the biggest issue in getting paid on time that I have always seen in businesses that I have run as a CFO, audited when I was at PwC or evaluated as an investor comes down to one general theme: there are a lot of companies that don’t invoice their customers on time. There are multiple reasons for this, but they all come down to broken and disjointed processes. At my two most recent companies, where I served in financial leadership, I rebuilt the quote-to-cash process from the ground up. Two incredible things happened: 1) deals closed in less than half the time, and 2) DSO dropped by over 30 days. The great news is that there are so many great tools to incorporate into your tech stack to make this process enjoyable for your customers and your employees.

What are you doing to get your customers to pay you on time? I’d love to hear what’s working in your business, where it’s broken, and I’d love to share what I learned rebuilding the quote-to-cash process at my companies.