Get paid before your client pays: what each option costs

You can get paid before a client settles an invoice in four ways. A deposit costs nothing, milestone billing limits your risk, an early payment discount costs about 36 percent a year, and invoice finance costs roughly 30 percent a year. Start with the free ones.

The wait is longer than the terms say

Every invoice you send is a loan to a client, at zero percent. Xero's Small Business Insights for the United States, published on 30 April 2026, found small businesses waited an average of 28.8 days to be paid in the March quarter, up from 28.3 days. Invoices arrived 9.0 days late on average, up from 8.4 days. The trend had been improving through much of 2025 and then turned.

For a business billing $8,000 a month, a 29-day wait means about a month of revenue is always sitting with someone else. That is the gap you are trying to close, and the options differ in price by a wide margin.

Option one: take money before the work

A deposit is the cheapest finance available because it costs nothing, and it works as a filter. A client who cannot pay a 30 percent deposit within two weeks will not pay the final invoice quickly either. You learn that before you have spent a single hour.

For anything longer than a month, bill on milestones. If you bill when defined events happen instead of at the end, the most you can ever be owed is one milestone. Your exposure stops growing with the length of the project. The mechanics are in the milestone payment schedule guide, and the awkward conversation is covered in how to collect a deposit before starting a project.

Exhaust this option first. Everything below it costs money.

Option two: the early payment discount, and the math

An early payment discount of 2/10 net 30 means 2 percent off if the client pays within 10 days, otherwise the full amount at 30 days. It sounds small and costs about 36 percent a year.

Here is the arithmetic. You give up 2 percent to be paid 20 days early. A year holds about 18.25 periods of 20 days, so 2 percent times 18.25 is roughly 36.5 percent annualized. On a $10,000 invoice that is $200 for 20 days of access to your own money.

That is not automatically a bad deal. If the alternative is a credit card at 24 percent or a missed rent payment, paying 36 percent annualized for twenty days is fine as a one-off. It is a poor deal when you print it on every invoice by default, because then you pay that rate on your whole revenue to solve a problem you may only have this month.

Two saner versions of the same idea exist. Offer the discount case by case, when you truly need the cash. Or offer 1 percent for payment within 7 days, which works out near 16 percent annualized and is closer to what money actually costs.

Option three: sell the invoice

Invoice finance means a third party advances most or all of an invoice now and collects from your client later. The cost depends on the provider, the client and how long the invoice stays unpaid.

FundThrough publishes a range of 1 to 5 percent for factoring on its pricing page. altLINE, a bank-backed factoring business, describes rates typically from 1 to 5 percent of invoice value with advance rates of 80 to 90 percent, depending on invoice volume, how creditworthy your client is and how long the invoice stays open. It also notes that some factors charge a minimum monthly volume fee if you do not factor a set amount.

Put that into one invoice. A $10,000 invoice at 2.5 percent for 30 days costs $250, which is about 30 percent annualized. That is in the same range as the discount, and often simpler, because you are not renegotiating terms with each client.

Check three things before you sign anything:

Recourse. If your client never pays, do you have to buy the invoice back? Usually yes. Non-recourse costs more and covers less than it sounds.

Notification. Does your client find out? In traditional factoring they are usually told to pay the factor, and some clients read that as a sign you are in trouble.

Concentration. If one client is 70 percent of your revenue, a factor will price that risk into your rate. It is unflattering feedback about the business, and worth hearing.

Option four: choose clients who pay

The cheapest cash flow fix is declining a slow payer before you sign.

For UK clients this is public information that very few people use. Large UK businesses must report on their payment practices, and anyone can look up the results in the government's payment practices service. Ten minutes there tells you whether a prospect's 30-day terms are real. If their own filing shows an average of 61 days, you now know to ask for a deposit and price the wait into the quote.

For EU work there is a legal floor. The European Commission states that businesses have to pay invoices within 60 days unless they expressly agree otherwise and the agreement is not grossly unfair, that public authorities pay within 30 days, and that late payment triggers interest of at least 8 percentage points above the European Central Bank reference rate plus a minimum of 40 euros in recovery costs.

Most small businesses never claim that interest. Naming it in your terms still helps, because it changes the default from "whenever" to "there is a consequence". Wording like that belongs in the contract, so check it with your lawyer.

A worked example on a $12,000 project

Take a three-month project worth $12,000, invoiced at the end and paid at the average: 29 days after invoicing.

Do nothing. You fund three months of work, then wait another month. The cash cost is zero and the risk is the whole fee if the client fails at month three.

Deposit plus milestones. Take 30 percent up front, then two milestone invoices. Your maximum exposure falls to about $4,000, you are paid roughly six weeks earlier on average, and the price is one slightly uncomfortable conversation at the start.

Early payment discount at 2/10 net 30 on the final $8,400. You receive $8,232 twenty days sooner and give up $168, which is about 36 percent annualized.

Invoice finance on the final $8,400 at 2.5 percent for 30 days. You receive roughly $8,190 now and pay about $210, near 30 percent annualized, and your client may be told to pay someone else.

The free option is also the one that cuts your risk the most. It is the only one that needs no third party to agree to anything after the work is done.

Terms that quietly cost you money

Before paying for speed, check whether the delay was written into your own paperwork.

Net 60 accepted without comment. Doubling the wait is a price change. If a client insists, fine, but it belongs in the rate.

Invoicing at month end. Finish on the 2nd, invoice on the 30th, and you donated four weeks. Invoice the day the milestone is accepted.

Missing purchase order numbers. In a larger company an invoice with no PO is invisible, not late. Ask which reference it needs before you send the first one.

Supplier portals nobody mentioned. Some companies only pay through their own portal. Register during onboarding, not after your first invoice has sat 45 days in a procurement queue.

No named payment contact. Chasing accounts@ means chasing nobody. Get a person's name at kickoff.

Fix those five and you will recover more days than any financing product would buy, at a cost of about an hour.

How Delivvo gets the deposit paid before work starts

Delivvo is built so the cheapest option, being paid on time in the first place, is also the easiest one to set up. The aim is simple: the deposit is paid before you open a file, and the rest of the money arrives on dates the client agreed to in writing.

1. Build a quote in Proposals from your packages and add-ons.
2. Send one link. On the Pro plan the client uses the one-page close: they pick their options, sign the contract and pay the deposit on the same page.
3. Delivvo then creates the client, the project, the contract, the invoice and the payment schedule for you.
4. Set up a payment schedule of up to 12 payments, so milestone invoices go out on the dates you chose and not when you remember.
5. Clients get a portal link that shows the money line for the project, so they can see what is due and when without writing to ask.
6. If an invoice goes unpaid, an automation sends late payment reminders at 7, 14 and 30 days and stops once the client pays.

The deposit goes through your own processor, whether that is Stripe, PayPal or Square, straight from your client to you. Delivvo is never the merchant of record and takes 0 percent, so you are not paying a platform a second fee to be paid sooner. Invoices follow your own numbering format and are numbered in sequence, and a void or a credit note keeps the record straight if a client disputes an amount. Every invoice also carries a verification code a client's finance team can check, which cuts the "we cannot find this invoice" delays. See the payments page for the gateways.

Next, look at how payments work or how the CRM fits around it.

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