How to Set Clear Payment Terms - Word-for-Word Scripts Inside

Hey there!

Welcome back to the Agency Finance Letters. This one will be a 5 min read.

Today, I'm sharing the exact scripts we use to align payment terms with clients right from the start - because prevention is better than cure.

If you hate awkward money conversations, you'll want to save this one.

The 2 Critical Payment Conversations

1. New Client Onboarding

2. Late Payment Follow-ups

Let's break these down...

1. New Client Onboarding Script 

When: During initial discussions
Why: Sets clear expectations before work begins

"I thought it would be helpful to discuss how our payment structure works.

For retainer services:

• We bill monthly in advance of your start date

• Net 7 payment terms

• We're happy to set up automatic payments

For project work:

• Invoice at project kickoff

• Net 7 payment terms

• We’ll begin our work as soon as the invoice is paid.

How does this sound? Does this align with your cash cycle?"

If they mention longer payment terms: "We've structured our terms to maintain consistent quality service levels. However, we can discuss options that work for both of us. What payment cycle would better align with your processes?"

2. Late Payment Follow-up Scripts

Day 1 Late: "Quick check-in - noticed we haven't received payment for invoice [#]. Wanted to make sure you received it and everything looks correct? Happy to help if you need anything from our end."

Day 7 Late: "Hey, apologies - just wanted to check in again on the invoice - have you gotten a chance to see this? If there's any issues would be happy to discuss a way to make this work better, it might help to:

1. Set up automatic payment

2. Adjust to a different billing date so it falls correctly in your cash flow cycle

3. Discuss a schedule that works better for you

Let me know what works best for you!"

If they still haven’t responded or paid by the next call, bring this up on the next call.

"Hey, while I've got you - I noticed the last invoice is still pending. No big deal at all, I know these things can slip through the cracks! Would it be helpful if we set up automatic payments to take this off both our plates? It would save you having to remember each month, and we can still send you the invoice for your records."

If they mention it's not their responsibility: "Ah gotcha - would you mind connecting me with the right person on your team? We can get automatic payments set up with them to make this smoother for everyone."

Pro Tips That Make These Work:

Discuss Payment Terms Early

• Address during onboarding

• Get alignment before work starts

• Document agreed terms clearly
  

2. Make It Easy to Pay

• Offer automatic payment options

• Send invoices consistently

• Include clear payment instructions
  

3. Focus on Partnership Instead of: "Your payment is late." Say: "Let's find a payment structure that works better for both of us."

Hopefully that helps take some mental burden off the next awkward payment conversation.

Late payments happen to the best of us - but it doesn’t have to be a reason you miss out on your earned revenue!

Next week we’ll go through the 90-Day Agency Cash Flow Makeover.

Until then,

Joey