Peter Marchetti runs a small residential building company in Perth's western suburbs. Three years ago his overdue receivables sat at 26 per cent of monthly billings. Today they sit at 10 per cent. The reduction, he says, was achieved without any change to the customer base and with three specific process changes.

Change one: progress payments

Contract terms were rewritten to require progress payments on defined milestones, invoiced weekly, and payable within seven days. The seven-day term was a change from the previous fourteen-day term. Perhaps unexpectedly, customers accepted it.

Change two: hold-back

Marchetti's contracts now include an explicit hold-back clause. If a milestone payment is more than fourteen days overdue, work on site pauses. The clause has been triggered three times. In all three cases, payment was made within seventy-two hours of the pause.

Change three: personal follow-up

The third change, and the one Marchetti says mattered most, was that he personally follows up on late payments rather than delegating to the office. The change was uncomfortable at first. It has, on his numbers, been decisive.