■ A fortnightly business advice column by Whakatāne accountant and business adviser, Jason Lougher

“We ain’t broke broke, we’re waiting on invoices broke.”

I heard that recently and laughed, then realised how accurate it is for a lot of New Zealand businesses right now.

Most of the businesses I work with aren’t short of work. They’re busy. Order books are full. Teams are flat out. On paper, things look fine, but for some of these businesses the cashflow tells a more complicated story.

Over the past year or so, business liquidations across New Zealand have lifted again, back above where they sat pre-Covid.

That alone should make business owners pause. When you dig into those failures, it’s rarely one dramatic event. It’s almost always a mixture of pressure points.

Rising costs. Margin squeeze. Owner fatigue. And very often, sitting quietly in the mix, is the non-payment of a few key invoices. Not hundreds of small ones. Just a handful that didn’t get chased hard enough, early enough.

In small regional towns, there’s another factor at play that doesn’t get talked about much.

Relationships. You know your customers. You see them at the rugby, the school gate, the café. They’re friends, neighbours, family connections.

No one wants to be “that person” who pushes too hard or makes things awkward. So, reminders get softened. Follow-ups get delayed. Conversations get avoided.

At the same time, debtor days are stretching. Late payment has become common enough that many businesses almost expect it. Thirty days becomes forty-five. Forty-five becomes sixty. Everyone stays polite. Everyone assumes it will come right.

And usually it does, just later than planned.

The issue is that this isn’t the economic environment to absorb those delays without consequence.

When costs are sticky and buffers are thinner than they were a few years ago, waiting an extra 30 or 60 days for payment doesn’t just affect cashflow. It quietly increases pressure everywhere else in the business.

The encouraging part is this. Debtor management is one of the most controllable levers a business owner has. But you need a clear, boring, repeatable process, and the discipline to follow it.

A good process actually protects relationships. It removes emotion and awkwardness because the rules are the same for everyone.

That means deciding, in advance:

■ How short can you realistically make your payment terms?

■ What happens the day payment is missed, procedurally rather than emotionally?

■ What’s your action at seven days overdue?

■ At fourteen?

■ At thirty?

■ When do you stop extending further credit?

■ When do you rely on security interests, assuming you have them?

■ And when does it stop being an internal admin task and get handed over?

None of this needs to be aggressive. In fact, the businesses that collect best are usually the calmest about it.

The process is predictable. The follow-up is consistent. The rules don’t change, and that clarity makes things easier for everyone involved.

One thing I know to be true is this. The longer an invoice is left, the harder it becomes to collect.

Not because people suddenly turn bad, but because urgency fades, priorities shift, and your invoice slips further down the list.

Then, when the business owner has had enough it almost becomes them being a problem collecting an invoice, they have been kind to carry.

Have a process. Write it down. Follow it every time.

And don’t let unpaid invoices quietly become one of the ingredients in a cocktail you never intended to mix.

If you’d like help setting up a plan, practical tips on how to implement it, or the right contacts for debt collection, feel free to email me. I’d genuinely love to help.

n Jason Lougher is the owner of Calc Business Advisors & Chartered Accountants. Our team advise businesses throughout the Eastern Bay of Plenty — and across New Zealand. Like this article or want to chat? Feel free to send me an email: [email protected]