Getting paid on time: an invoice-ageing routine for CA firms

Ask almost any small CA firm about its biggest headache, and fee collection will be near the top. The work gets done on time, the returns get filed, the audit gets signed. The bill goes out. And then it sits. One month, two months, sometimes until the next year's work starts and the client says, "Let us settle everything together."

Part of this is the nature of the profession. We value long relationships, clients are often friends or family referrals, and asking for money feels uncomfortable. But unpaid fees are not just a cash-flow problem. They affect how you pay staff, how you plan, and even how you feel about clients you otherwise like.

The good news is that most of it can be managed with a simple weekly routine. This article walks through an invoice-ageing method that any CA firm can run with nothing more than a list and fifteen minutes a week.

What invoice ageing means

Ageing simply means sorting your unpaid bills by how long they have been outstanding. Instead of one big number ("clients owe us a lot"), you see exactly which bills are fresh, which are getting old, and which need serious attention.

The standard way is to use four buckets:

Once your bills are in these buckets, the next step becomes obvious for each one.

Set up your ageing list

You may already track outstanding fees in Tally or an Excel sheet. That is fine. What matters is that you can see, for every unpaid invoice:

• Client name
• Invoice number and date
• Amount billed and amount received so far
• Balance due
• Days outstanding (today's date minus invoice date)
• Last follow-up date and what the client said
• Person responsible for following up

If you keep this in Excel, a single formula for "days outstanding" lets you sort the whole list from oldest to newest in seconds. A CRM like Nexus can keep invoices and receipts against each client and show the outstanding amount alongside the follow-up history, which saves you matching two separate sheets.

The weekly collection review

Pick one fixed slot every week, say Monday at 10 a.m., and protect it. Fifteen minutes is enough for most small firms.

The routine

1. Update receipts. Make sure every payment received last week has been recorded against the right invoice.
2. Sort by age. Look at the list from oldest to newest.
3. Start with 90+. For each bill, decide the next step and who will take it. These usually need the partner.
4. Move to 61–90 and 31–60. Assign a reminder or call for each one, with a date.
5. Glance at 0–30. Note any that cross 30 days this week.
6. Note the total in each bucket. Just write it down. Over a few months you will see whether things are getting better or worse.

The review is not about chasing everyone every week. It is about making sure no bill is forgotten.

A polite escalation ladder

Most clients are not refusing to pay. They are busy, or the bill is sitting with their accountant, or they are waiting for their own customers to pay them. A gentle, step-by-step approach respects the relationship while making your expectation clear.

Step 1: Friendly reminder (around day 25–30)

Step 2: Follow-up with a call (around day 40–45)

Send a message, then call the same day or the next. On the call, simply ask if there is any issue with the bill. Sometimes there is a genuine query, a wrong GSTIN, or a missing PO, that you can fix in five minutes.

Step 3: Conversation with the decision-maker (around day 60–75)

If the bill sits with an accounts person who keeps saying "will do", speak with the owner or director directly, politely. The partner may want to make this call.

Step 4: Payment plan and a pause (around day 90+)

Offer to split the balance into two or three instalments with fixed dates. At the same time, gently let the client know that new non-urgent work will wait until the account is regularised.

When to pause work

This is a judgment call, and every firm will draw the line differently. Some practical thoughts:

• Decide your policy in advance, not in the heat of the moment. For example, "We pause new, non-statutory work when a bill crosses 90 days without a payment plan."
• Be careful with time-bound filings. Weigh the client's exposure and your professional responsibilities before holding back anything with a deadline. When in doubt, speak with the client clearly and in good time, and keep a record of the conversation.
• Tell the client before you pause, not after. A surprise is what damages relationships, not the policy itself.
• Write your payment terms into engagement letters and proposals. When terms were agreed at the start, the conversation later is much easier.

Small habits that prevent the problem

The easiest bill to collect is one that was raised correctly and promptly in the first place.

• Raise the invoice the day the work is delivered, not at month-end.
• Mention the service and period clearly on the bill, so the client's accountant does not have to ask.
• Send the invoice to the person who actually pays, not just to your usual contact.
• Thank clients when they pay. It sounds small, but it builds the habit.

A simple start for this week

• Make a list of every unpaid invoice with its date, balance and days outstanding.
• Sort it into the four buckets: 0–30, 31–60, 61–90 and 90+.
• Block a 15-minute weekly collection review in your calendar, same day and time each week.
• Send the Step 1 or Step 2 reminder to every bill over 30 days old.
• Write down your own policy on when to pause work, and share it with your team.