Finance & Cash Flow
Late payment is a cash problem you can start fixing before the work begins
Delayed payment is a persistent problem for small businesses in India, and many owners handle it largely by hoping. This session covers the terms to agree before the work starts, the credit decision itself, the payment protections the law gives micro and small suppliers, and how to escalate without destroying the relationship.
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Most late payments were made possible before the work started.
The terms were never written down, the credit was extended without a decision, the invoice went out late, and nobody followed up until it was sixty days overdue. By then the conversation is adversarial and the money is somebody else's working capital.
Almost all of that is preventable with a few things agreed in advance, and a follow-up rhythm that starts before the due date rather than after it.
How to get paid on time
38 topics across 7 areas. Seven things that decide it.
Agree the Terms in WritingBefore the work starts, not after the dispute.6 topics
- Payment period, stated in days
- What triggers the invoice
- Part-payment or advance
- What happens on late payment
- Who signs off delivery
- What is out of scope
A purchase order or a written confirmation is enough. A verbal agreement is what you will be arguing about.
Deciding Whether to Extend CreditIt is a lending decision, made without a bank's tools.5 topics
- How long have they been trading?
- How do they pay others?
- How large is this relative to your revenue?
- Can you absorb it if they never pay?
- What is the smallest first order you can start with?
Invoice Properly, and ImmediatelyA surprising amount of delay starts here.5 topics
- Invoice on the day, not at month end
- To the right person, not the general address
- With the reference they need to process it
- With bank details on it
- Confirm they have received it
Follow Up Before It Is LateThe single highest-return habit.5 topics
A short note a week before the due date is not chasing. It is the message that gets your invoice into the payment run rather than the pile.
- A week before due
- On the due date
- Weekly after
- Escalating the recipient, not the tone
- Keeping every message in writing
When It Is Seriously OverdueWhere most owners freeze.6 topics
- Speaking to somebody senior
- Stopping further supply
- Agreeing a payment plan and documenting it
- Sending a formal notice
- When a lawyer is proportionate
- When to write it off and move on
The most expensive outcome is continuing to supply somebody who is not paying.
What the Law Gives Micro and Small SuppliersProtection that exists, if you are registered and the buyer is in scope.6 topics
- Udyam registration: free, online, and what identifies you as a micro or small enterprise
- The MSMED Act payment limit: no more than 45 days from acceptance of the goods or services, and 15 days where nothing is agreed in writing
- Interest on delay: compound interest at three times the RBI bank rate
- MSME Samadhaan, the government portal for a registered micro or small supplier to file a delayed-payment complaint
- Section 43B(h): a buyer's tax deduction for an overdue payment to a micro or small supplier waits until it is actually paid — one reason a buyer may care about paying on time
- TReDS, the RBI-regulated platforms where a supplier can sell approved invoices to financiers for early payment
Drawn from the government's Udyam and MSME Samadhaan portals and published explainers on section 43B(h) and TReDS. Medium enterprises sit outside these protections, and whether a trader is covered is a point to confirm. How any of this applies to a particular account is a question for a CA or lawyer, not for this session.
Customer ConcentrationThe risk hiding behind good revenue.5 topics
- What share your largest customer represents
- What happens if they pay late for two months
- What happens if they leave
- How to reduce it deliberately
- Why growth with one customer is fragile
Documents that decide a dispute
- A written quotation, accepted
- A purchase order or written confirmation
- Proof of delivery or completion
- The invoice, sent and acknowledged
- Every follow-up, in writing
- Any agreed variation, also in writing
Habits that change the numbers
- Invoice the day the work is done
- Follow up a week before the due date
- Never supply further against a seriously overdue account
- Review receivables weekly, not monthly
- Know your average days to payment, and watch it
How the session runs
An owner and a finance professional work a real overdue account from the beginning — what was agreed, what was documented, where the follow-up stopped. Participants then draft the terms they will use going forward and one escalation message for an account they currently have outstanding.
What your students leave with
- Payment terms they will agree in writing from now on
- A method for deciding whether to extend credit
- An invoicing habit that removes avoidable delay
- A follow-up rhythm that starts before the due date
- A way of escalating that keeps the relationship intact
- A clear view of their customer concentration risk
- Awareness of the statutory payment protections for micro and small suppliers, and whether they apply to them
Scheduled sessions
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- Tell us what you need
A topic or a question is enough to start.
- A person replies
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- Agree the next step
We work out the details together.
Most late payments were made possible before the work started.
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