Overdue Invoice: What to Do at Every Stage
The action you take in the first 30 days of an overdue invoice has the biggest impact on whether you get paid. Here is what to do — and when.
Day 1–7 overdue
Phone the accounts payable contact. Confirm invoice receipt. Ask for a payment date. Follow up the call with a written email summary. Most administrative late payments resolve at this stage with a single call. If there is a promise of payment, record it in writing and follow up on the promised date.
Day 8–30 overdue
If the promised payment has not arrived, send a written reminder referencing the previous communication. Escalate internally if you have a management contact at the debtor's business. Consider putting the customer on credit hold if they are still ordering from you. If you are still getting promises but no payment, it is time to formalise.
Day 30–60 overdue
Send a formal letter of demand: amount owed, reference to invoice, a specific payment deadline (7–14 days), and notice that further action will follow. If you have not already, check the debtor's credit position — are they paying other creditors? Are there signs of financial difficulty? If a professional recovery agency has not yet been engaged, this is the time.
Day 60–90 overdue
Refer the account to a professional commercial debt recovery agency if you haven't already. At 60–90 days, internal chasing has typically exhausted its effectiveness. An agency applies fresh, systematic pressure through multiple channels and can escalate to legal options if needed. Do not let the account age further — recovery rates decline sharply past 90 days.
Day 90+ overdue
At this stage, direct recovery becomes more difficult. The agency may still resolve it, but the likelihood decreases and the commission rate may be higher. If the agency cannot recover within a further 30–60 days, legal action becomes the realistic option. Assess the debtor's solvency before committing to legal costs — a judgment against an insolvent debtor is not worth the cost.
A note on disputed invoices
If the debtor disputes the invoice at any stage, document the dispute in detail. Investigate promptly. If the dispute is baseless or a delay tactic, continue recovery with supporting evidence. If there is a genuine quality or scope dispute, attempt negotiation — a reduced settlement may be more practical than litigation.
Frequently asked questions
At what point is a debt too old to recover?
Recovery rates decline significantly after 90 days. The limitation period (generally 6 years in most states) sets the legal cutoff, but practical recovery becomes progressively harder. At 12+ months, legal action is often more effective than agency recovery for significant amounts.
What if the debtor is ignoring all contact?
Non-response to agency contact is itself documentation that the debtor has been given opportunity to engage. A professional agency will escalate contact methods and frequency before recommending legal escalation. A debtor who ignores contact generally has no grounds to later claim the debt was not communicated.
Can I put a customer on credit hold while chasing an overdue invoice?
Yes, and for most businesses this is standard practice once an account is significantly overdue. Check your terms of trade — most include a right to suspend supply on overdue accounts. Communicate the credit hold in writing.
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