Cost of not doing
What chasing invoices by hand costs you a year
The hours are trivial. What is expensive is the invoice you stopped chasing in week four, and you have never counted those.
Your number
Three inputs you know and one you have to guess. The guess is the important one.
Be honest. Most people say zero and then remember one.
- Hours a year spent chasing
- 6.7 hours
- That time, priced
- $470
- Invoices abandoned, priced
- $1,800
- Total annual cost
- $2,270
At about 24 minutes per late invoice across the whole ladder, including the re-reading and the deciding.
At the defaults — 48 invoices a year, 35% late, $70 an hour, one invoice abandoned at an average value of $1,800 — that is 6.7 hours of chasing, worth $470, plus $1,800 written off, for a total of $2,270 a year.
Assumptions behind these numbers
- 24 minutes per late invoice is my own estimate across a full five-message ladder, including deciding whether to send each one. Measure your own if the number matters to you.
- The abandoned invoice is counted at full value. In practice some of it would have arrived eventually.
- Interest and late fees are excluded, because most freelancers never charge them. There is a separate calculator if you do.
- The third cost described below — slow payers being quietly subsidised — is not in this total, because I do not know how to estimate it honestly.
The third cost
The discount you never agreed to give
Two of the three costs are in the calculator. The third is not, because I cannot put a defensible number on it, and a made-up number would be worse than an acknowledged gap.
It works like this. A client who pays at ninety days is borrowing from you at zero percent for two months. If you would otherwise have had that money in a business account earning something, or if you covered the gap on a card, the difference is a real transfer from you to them. At $9,000 outstanding for sixty days, even a conservative view of that is a few hundred dollars a year.
But the larger part is behavioural and unmeasurable: the slow-paying client is also the one you deprioritise, do slightly worse work for, and eventually resent. That degradation costs you the relationship, and the relationship was worth more than the interest.
Three ways to spend the same problem
| Approach | Money | Time | What it does not fix |
|---|---|---|---|
| Chase by hand | $0 | 6–15 hours a year | The messages you never send |
| Take deposits up front | $0 | Nothing | Nothing — but it costs you some clients |
| A $19/mo scheduler | $228 a year | Under an hour a year | A client with no money |
| Factoring or collections | 5–15% of the invoice | Nothing | The relationship, usually permanently |
Deposits are the best answer on this table and the one nobody wants to hear, because asking for one is the same conversation as chasing, moved earlier.