Payment control is the process of managing invoicing, tracking receivables, and ensuring timely collection of payments. For agencies, effective payment control directly impacts cash flow and the ability to operate smoothly.
Why Payment Control Matters
Poor payment management creates cascading problems:
Cash flow issues: Late payments strain your ability to pay employees, vendors, and operational costs.
Hidden profitability problems: A "profitable" project means nothing if you never collect the money.
Administrative burden: Chasing late payments consumes time that could go to billable work.
Client relationship strain: Awkward payment conversations can damage otherwise good relationships.
Growth limitations: Uncertain cash flow makes it hard to invest in growth or hire confidently.
Best Practices for Payment Control
Implement these strategies for healthier cash flow:
Clear payment terms: Define payment expectations upfront in contracts—net 30, net 15, or milestone-based.
Prompt invoicing: Invoice immediately when work is complete or milestones are reached. Delays invite delays.
Easy payment options: Offer multiple payment methods to reduce friction. Accept credit cards, bank transfers, and online payment platforms.
Automated reminders: Set up automatic payment reminders before and after due dates.
Consistent follow-up: Have a clear process for escalating overdue accounts—don't let things slide.
Deposits and retainers: For new clients or large projects, require upfront payment to reduce risk.
Connecting Payments to Project Management
For agencies, payment tracking should integrate with project workflows:
Milestone billing: Invoice at project milestones rather than only at completion. This improves cash flow and reduces risk.
Time-based billing: For hourly work, ensure time entries connect directly to invoicing so nothing falls through the cracks.
Profitability visibility: Know which clients pay promptly and which don't. Factor payment behavior into client profitability analysis.
Retainer management: Track retainer hours and balances to ensure proper billing and avoid scope creep.
Tools like Monton connect project management and time tracking with financial visibility, making it easier to understand true project profitability including payment timing.