Hiring guide
Overdue invoices: what a fractional CFO should fix beyond reminders
By CFO Index · Published
A fractional CFO can help identify why invoices remain unpaid and establish who resolves each cause. That is different from sending more reminders. Start with the receivables ledger and a small set of material overdue balances, then connect the findings to the cash forecast.
Reconcile the starting list
Agree the reporting date and verify that receipts, credit notes and disputed items are reflected in the ledger. Remove duplicate collection tasks, not valid balances. Have the accounting owner confirm the list before the CFO draws conclusions from ageing bands. A large overdue total may combine genuine payment delays with posting errors and unresolved commercial disagreements; those need different treatment.
Classify the reason before choosing the action
Separate missing purchase orders, incorrect invoices, delivery disputes, agreed payment plans and unanswered requests. Assign an owner who can actually resolve the issue. An account manager may need to confirm acceptance while finance corrects a document. The CFO can coordinate priorities, but should not promise that a reminder sequence will resolve a disputed contract. Seek qualified advice when enforcement or insolvency questions arise.
Use a focused weekly review
For each material item, record the amount, blocker, last verified commitment, next action and owner. Keep promised payment dates distinct from your forecast assumptions. Do not treat a customer's tentative response as guaranteed cash. British Business Bank's working-capital guidance provides context for why collections matter; the review structure here is an editorial operating suggestion, not a prescribed collections standard.
Show a cash-timing example
Hypothetical case: an expected €30,000 receipt moves from the first to the fourth week of a month. The month's total receipts may remain unchanged while a payroll-week shortfall appears. Ask the CFO to show that movement in the weekly forecast and identify which management decisions it affects. Do not count the money twice when revising the expected date.
Repair the upstream process
Review whether the invoice was accurate, sent to the right recipient and supported by agreed evidence of delivery. Ask sales and operations which problems recur. A useful CFO project might recommend clearer billing ownership or an acceptance checklist. Changes to commercial terms require the relevant approval; do not silently rewrite payment terms in a finance spreadsheet and assume customers have agreed.
Measure what improved
Track verified collections, resolved disputes and preventable invoice errors against a documented starting point. Avoid claiming that every receipt resulted from the intervention. Keep customer relationships and legal boundaries in view. The deliverable should be a reconciled ageing list, an accountable action process and updated cash assumptions, with a clear handover to the person who will maintain them.