Chronic non-payments? These 3 tips will get your cash flow back in the black

Here are 3 concrete tips to get your cash flow back in the black:

💸 1. LPO and invoice factoring: turn your unpaid invoices into immediate cash

• Instead of waiting 60 to 90 days for clients to pay, some financial institutions now structure credit directly around your operational trade cycle .
• With Local Purchase Order (LPO) financing or invoice discounting, you get a cash advance as soon as you hold a purchase order or unpaid invoice .
• Banks like Faulu Microfinance Bank offer these products under their Biashara SME line. You bypass the 30 to 90-day wait .
• Result: you stop letting your money sleep in your clients' pockets.

📋 2. Automated reminders and a structured recovery process

• Manual follow-ups are often inconsistent due to workload pressure. Set up an automated system: reminder 7 days before due date, on the day, and 7 days after non-payment .
• Use WhatsApp Business or invoicing tools like Wave to send automatic reminders. Kenyans open their messages in under 15 minutes.
• Segment your customers by risk: some just need a reminder, others need firmer action .
• If the client still doesn't pay, send a formal Letter of Demand with a 7 to 14-day deadline .

⚖️ 3. Legal recourse: the fast remedies you don't know about

• Before court, try negotiation with a payment plan and written acknowledgement of debt. The statute of limitations is 6 years and is interrupted if the debtor acknowledges the debt .
• The Small Claims Court is your best ally: fast process (60 days on average), minimal fees (KES 1,000–5,000), no lawyer required. It handles claims up to KES 1 million .
• For debts over KES 100,000, a statutory demand can force a company to pay within 21 days or face liquidation .
• If you know your debtor's bank account, apply for a garnishee order to deduct the amount directly from their account .

Tip: The Treasury recently approved a Sh255 billion disbursement to reduce government arrears . If you work with government, ensure your invoices are in the IFMIS and eTIMS systems to be prioritised.

Do it now: Identify your 3 biggest unpaid debts. Send them a WhatsApp or email follow-up today. For the oldest one, prepare a formal demand letter for this week.

Sources: Business Daily – Structured Trade Finance 2026; Controller of Budget – Pending Bills Report 2026; Strathmore University Business School – Strategies for Kenyan SMEs 2025; Musyoka & Mutinda Advocates – Debt Recovery for SMEs 2025; Grandliga – Debt Recovery in Kenya 2024; Beveron Technologies – Digital Debt Collection Strategies 2026.

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