How we cut receivables from 150 days to 25

150 days.

That's how long it took our customers to pay us on average. Our terms were net-30.

In 2024, we cut that to 25.

Post-2022, fundraising dried up. We made the call to become profitable. No more surviving on investor cash. We needed customers to actually pay us. This number became my everything.

Nobody talks about this stuff. But it took Perch being on the brink of death to take it seriously, and from talking with other founders, I know this is a constant struggle. So maybe it'll help someone reading this. The CEO's time can and should be spent on anything, as long as it's the most pressing problem. Keeping the lights on was it.

Most early startups don't have an operations team or an internal finance function. That hire is hard to justify when every dollar is going into product or growth. So our collections landed on sales or customer success.

That's what we did. And it didn't work.

Three reasons:

1. Salespeople aren't trained for collections. It's a different skill set entirely.
2. They aren't motivated by it. Their energy goes where their commission goes, and chasing invoices doesn't close deals.
3. When commission depends on someone else processing a payment, morale suffers fast. They needed to be selling, not waiting to get paid.

So we buckled down and changed the model.

Three moves that made the difference:

1. We pulled collections off sales and handed it to operations. Operations didn't have relationships with our customers, so they were comfortable being more assertive when needed, respectfully of course. They had the tools and the skill set to automate the process. And they had full visibility into what was being paid when, so they could direct their energy at the right place at the right time. You're probably thinking, duh. But with a small team and a sales team that owns the relationship, it took us a while to get there.

2. We made it a priority. AR age became a company OKR. Everyone cared about it. 😂

3. We stopped sending invoices to our day-to-day contacts. Coaches and sport scientists are busy. They don't process payments. Starting at contract signing, we collected an accounts payable contact at every institution and routed all invoices directly there. Getting that information before we needed it was the single biggest factor. Seems obvious in hindsight. But we never thought to collect AP info until we desperately needed it.

150 days to 25. That shift is what kept the lights on.

Running a startup is not always glamorous. Sometimes the most important work is the stuff nobody puts in a fundraising deck. Build the systems before you need them. You might need them sooner than you think.