Most small businesses don’t fall behind because of sales.

They fall behind because of cash flow timing, and that timing is controlled almost entirely by Accounts Receivable.

You close deals.

You deliver the work.

But the money arrives late.

Research shows:

• 70% of SMBs get paid late
• (QuickBooks 2025 Late Payments Report:  https://quickbooks.intuit.com/r/small-business-data/small-business-late-payments-report-2025/)
• 64% say delayed payments disrupt operations
• (PYMNTS Vendor Payments Report: https://www.pymnts.com/accounts-payable/2024/64-percent-of-smbs-face-delayed-payments/)

This isn’t just an inconvenience, it’s a structural risk.

Late payments delay payroll, stall hiring, and weaken a business’s ability to reinvest.

The solution isn’t “chasing harder.”

It’s building AR discipline, consistent, repeatable processes that reduce delays and make cash predictable.

Below are the five core AR practices every SMB should master.

1. Set Payment Terms That Remove Guesswork

Payment delays often begin before the invoice is even sent, when terms are vague.

The strongest AR teams use payment terms as a tool, not an afterthought.

What this practice means

Clear, unambiguous terms that define:

• exact due date
• required documents (PO, job codes)
• accepted payment methods
• expectations for delivery and approval

Why it matters

Ambiguity in terms is one of the top reasons AP teams delay invoices.

A missing PO or unclear due date pushes your invoice into the next weekly or monthly cycle.

How NerdPay helps

NerdPay templates enforce required fields, standardize due dates, and include 1-click payment links, reducing confusion and approval friction.

2. Follow Up With Structure, Not Emotion

Most unpaid invoices aren’t objections. They’re oversights.

AP teams process hundreds of invoices. A reminder is normal and expected.

What this practice means

A predictable reminder flow, not ad hoc messages:

• reminder on due date
• second reminder after 7 days
• third reminder after 14 days
• weekly reminders until paid

Why it matters

Studies show nearly half of invoices are paid after the first reminder.

Consistent follow-up converts “pending” into “paid.”

How NerdPay helps

NerdPay sends reminders automatically with tone variation (gentle → firm → escalation), removing awkwardness and ensuring consistency.

3. Track AR in Real Time (Not at Month-End)

Many SMBs examine AR once a month, when the accountant closes the books.

That means they only see what already happened, not what is at risk.

What this practice means

Live visibility of:

• overdue invoices
• upcoming cash inflows
• aging buckets
• chronic late payers
• invoices waiting on client approval

Why it matters

You can’t follow up early if you don’t know what’s slipping.

Real-time tracking turns AR from reactive to proactive.

The Faster Payments Council found that 57% of SMB payments are still managed manually, making forecasting difficult.

https://fasterpaymentscouncil.org/blog/13648/Addressing-SMB-Faster-Payments-Challenges

How NerdPay helps

NerdPay shows a daily snapshot: today’s due invoices, 30/60/90-day aging, and predicted cash-in based on client behavior.

4. Reduce Disputes Through Better Documentation

Most payment delays are not disagreements, they’re missing information.

Missing PO.

Vague descriptions.

No contract reference.

Incorrect service dates.

What this practice means

Sending complete, auditable invoices including:

• PO number
• contract or SOW reference
• service period
• itemized detail
• attached proof of delivery/time logs

Why it matters

Every dispute adds 7–30 days to payment.

Disputes are the silent DSO killer.

How NerdPay helps

NerdPay requires mandatory fields and lets you attach supporting files so invoices go out clean — drastically reducing rejections.

5. Automate Everything That Doesn’t Require Judgment

Every business owner hates the admin part:

copying invoices, checking due dates, sending reminders, updating spreadsheets.

These tasks aren’t difficult,  they are repetitive.

What this practice means

Automating:

• invoice sending
• reminder sequences
• payment links
• aging reports
• reconciliation

Why it matters

Manual AR creates delays and bottlenecks.

Automation ensures consistency.

Upflow’s collections benchmark shows companies who automate their AR process:

• reduce DSO by 5–12 days
• redirect 30–60% of AR labor hours
• increase on-time payment rate significantly
• https://upflow.io/blog/ar-collections/13-accounts-receivable-cash-collection-statistics-2024/

How NerdPay helps

NerdPay handles all recurring AR tasks so the business owner only deals with exceptions, not every invoice.

5 Metrics Every SMB Should Track to Strengthen AR

Most SMBs only look at “overdue invoices,” but strong AR requires tracking these metrics:

1. DSO (Days Sales Outstanding)

How long it takes to get paid after invoicing.

2. ADD (Average Days Delinquent)

How late customers pay after the due date.

3. CEI (Collection Effectiveness Index)

Measures how effective your AR process is,  not just how much is overdue.

4. Percent of Current A/R

Shows what portion of invoices are paid on time.

5. Dispute Rate

How many invoices get rejected (missing PO, wrong details, inconsistencies).

When SMBs track these metrics, they spot patterns early:

• customers who chronically pay late
• bottlenecks in their invoice approval
• issues in their own documentation
• seasonal payment risks

FAQs

1. What’s the most important AR best practice for SMBs?

Clear payment terms. They reduce approval delays and clarify expectations.

2. Why should SMBs automate AR processes?

Automation ensures reminders go out on time, reduces errors, and supports faster payments without manual effort.

3. How does real-time AR tracking help SMBs?

It helps catch late invoices early, improves forecasting, and prevents unexpected cash shortages.

If AR feels like a monthly fire drill, it’s because the process depends on you, not a system.

NerdPay turns best practices into automatic workflows so you get paid faster, more consistently, and with less stress.

Explore NerdPay AR automation

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