How Contractors Can Collect Payments Faster

The fastest-growing contractors are not the ones with the most jobs. They are the ones with the shortest days sales outstanding (DSO). Here is how to cut yours in half.

1. Take a deposit. Always.

For any job over $500, take a 25–50% deposit before scheduling. Reasons:

• Confirms commitment.
• Funds materials.
• Filters tire-kickers.
• Cuts your cash conversion cycle by weeks.

If a customer balks at a deposit, the job will not close anyway.

2. Milestone-bill on jobs over $5K

A 50% deposit / 25% mid-job / 25% final structure keeps you cash-positive throughout. Multi-week jobs without milestones bankrupt contractors every year.

3. Send the invoice the day you finish — not next Friday

The single biggest correlated factor with fast payment is how fast you send the invoice. Same-day invoices get paid in an average of 9 days. Invoices sent more than a week later average 32 days.

4. Embed a payment link

A clickable "Pay Now" link with Stripe, PayPal, or Square removes 100% of the friction. Customers do not need to dig out their checkbook.

5. Use a structured follow-up cadence

• Day 0: invoice sent.
• Day 7: friendly text reminder with link.
• Day 14: email reminder + late-fee notice.
• Day 21: phone call.
• Day 30: certified mail or collections handoff.

6. Charge late fees — and tell people up front

A 1.5% per month late fee on your contract changes behavior. Most customers pay early to avoid it.

7. Accept cards even if the fee stings

A 2.9% fee on a $5,000 invoice paid in 2 days is far cheaper than the same invoice paid in 60 days. Cash flow > margin on receivables.

BusyBuddy supports Stripe, PayPal, and Square with embedded pay links, deposit requests, and automated payment reminders. Try it free.