How to Chase Outstanding Invoices Effectively

Outstanding invoices are more than a nuisance—they silently tax your growth. Every day cash is locked in receivables is a day you can’t spend on inventory, payroll, or expansion. For entrepreneurs, that can mean missed discounts or a bumpy runway. For large enterprises, late payments distort forecasts and increase write-offs in older “aging buckets” (30, 60, 90+ days). The longer an invoice lingers, the lower your odds of full recovery. Treat time as your ally: move early, stay consistent, and escalate on a schedule.

Set the Ground Rules Before You Invoice

Collections start long before an invoice is late. Establishing expectations upfront reduces friction later.

• Clear payment terms: Put due date, accepted methods, and late charges in every quote, SOW, and contract.
• Credit checks: For new or high-ticket clients, run a credit assessment and set a sensible limit.
• Deposits or milestones: Upfront deposits (20–50%) or milestone billing reduce exposure.
• Purchase orders: When selling to enterprises, insist on PO numbers and vendor onboarding completed before work.

Contract Language That Reduces Risk

Keep clauses short and readable:

• Late fees/interest: State the rate, when it applies, and the grace period.
• Venue and governing law: Choose a jurisdiction you can practically enforce.
• Dispute window: Require written disputes within 7–14 days of invoice receipt.
• Right to suspend service: If invoices exceed X days past due, you may pause or limit service.

Build an Invoice That Gets Paid

Make paying the path of least resistance:

• Crystal-clear line items: Use client’s project codes and PO references.
• All the details: Legal entity name, remit-to address, bank info, tax IDs, currency.
• Multiple payment options: Bank transfer/ACH, card, and (for enterprises) vendor portals.
• Attach proof: Timesheets, delivery receipts, acceptance notes, completion certificates.
• One-click actions: Link to a payment portal or “Pay Now” button.

A Polite, Predictable Dunning Timeline

A “dunning” process is just a polite, scheduled follow-up plan. Consistency beats drama.

• Day −3 (pre-due): Friendly reminder with invoice copy and payment options.
• Day 1 (just overdue): Short nudge confirming the due date has passed; ask for ETA.
• Day 7: A firmer message; request a specific payment date. Offer help if there’s an internal approval delay.
• Day 14: Phone call + email recap. Mention service pause triggers per contract.
• Day 30: Final internal notice; advise that the file may be placed with a collection agency or attorney.
• Day 45–60: Escalate. Delays beyond 60 days materially reduce recoverability.

Email & Call Scripts (Short and Friendly)

Keep It Human: Psychology of Prompt Payment

• Ease wins: Reduce clicks, approvals, and ambiguity.
• Specificity nudges action: Ask for a date and time, not “soon.”
• Reciprocity: A quick resolution discount (e.g., 2% if paid by Friday) can unlock approvals.
• Social proof: “As with other enterprise clients, we can process via your AP portal or ACH—whichever is standard.”

Disputes vs. Excuses: Triage Like a Pro

When a client pushes back, figure out whether it’s a genuine dispute or a stall.

Rapid triage checklist:

• Was the PO used? Are deliverables attached?
• Did we meet scope and acceptance criteria?
• Is there a missing vendor setup step?
• Has approver turnover delayed things?

If disputed: Acknowledge, restate the issue in writing, propose a call, and agree on a timeline to resolve. Capture everything in your file. Settlement (e.g., a small credit) may be cheaper than months of delay.

Payment Plans That Actually Work

For clients under real cash stress, structured plans recover more than ultimatums.

• Short horizon: 4–8 weeks is ideal.
• Front-loaded: Larger first payment shows commitment.
• Auto-drafted: Use ACH with written authorization.
• In writing: Confirm schedule, consequences for missed installments, and that services remain suspended until completion (if applicable).

When to Pause Service or Withhold Deliverables

Pausing isn’t punitive; it’s risk management. Use clear thresholds (e.g., 21 days past due or hitting a credit limit). Give notice, reference contract language, and explain the path to reinstatement. Never surprise a client; telegraph the step at least once in writing and once by phone.

Escalation Paths: Agency vs. Attorney

When internal steps fail, professional help preserves your time and increases leverage.

• Collection agency: Best for straightforward, undisputed balances where consistent follow-up and skip tracing can work. Lower cost, non-legal.
• Collection attorney: Preferable for high-value claims, repeat delinquencies, clear breach of contract, or where legal demand and lawsuit are credible next steps.

Preparing a Clean, Winnable File

Your future self (and your chosen professional) will thank you:

• Executed contracts/SOWs and change orders
• Invoices, statements, and ledger with aging
• Delivery/acceptance proofs and email confirmations
• Dispute logs and call notes with dates
• Company details: legal entity, addresses, key contacts

How Retrievables Helps with Commercial Collections

When you’re ready to escalate, choosing the right partner is half the battle. Retrievables focuses on commercial debt collection, matching businesses with the most suitable collection attorney or agency for their industry, balance size, location, and claim complexity.

What that means for you:

• Smart matching: Share your claim details once; get connected to vetted professionals who fit your case profile.
• Attorney or agency—without guesswork: Retrievables helps you land on the right track (non-legal or legal) based on the facts.
• Time back to your team: Offload research, outreach, and coordination so finance and sales can focus on revenue.
• Enterprise-ready: Ideal for portfolios with diverse jurisdictions, currencies, and entities.

Retrievables doesn’t replace your process—it supercharges it at the point where internal nudges stop working.

Compliance, Tone, and Brand Protection

Your brand is on the line every time you follow up. Keep communications:

• Accurate: No threats, no exaggerations.
• Documented: Log every touch with date, channel, and outcome.
• Respectful: Businesslike tone, short messages, and clear next steps.
• Consistent: One voice—ideally from AR/collections, not multiple departments.

Metrics That Matter

Watch these indicators to see whether your strategy is working:

• DSO (Days Sales Outstanding): Lower is better—your cash returns faster.
• CEI (Collection Effectiveness Index): Measures how much of your available receivables you actually collect in a period.
• Promise-to-pay rate: Percent of contacts that yield a specific payment date.
• Roll rate: The share of invoices moving from 30 to 60 to 90+ days.
• Right-party contact rate: Shows whether you’re reaching decision-makers.

Tech Stack Checklist

Upgrade your AR with tools that make paying easy and following up automatic:

• Invoicing & AR automation: Auto-send, auto-remind, and reconcile.
• Customer portal: Let clients view invoices, disputes, and pay online.
• Payment rails: ACH, wires, cards; save methods securely.
• CRM/ERP integration: Sync credits, disputes, and collections notes.
• Analytics: Dashboards for aging, contact outcomes, and team activity.

Global & Enterprise Considerations

Large organizations operate across borders and entities:

• Currency & tax: Quote and bill in the client’s currency; include VAT/GST where needed.
• Entity hygiene: Invoice from the correct legal entity tied to the contract and PO.
• Jurisdiction: Choose escalation partners familiar with local law and enforcement.
• AP portals: Learn each portal’s quirks—required fields, attachment formats, acceptance steps.

FAQs

Conclusion

Learning How to Chase Outstanding Invoices is really about building a calm, consistent system. Start strong with clear terms, craft invoices that are easy to pay, follow a predictable cadence, and escalate at the right time. Keep your tone respectful, your records tidy, and your brand intact. And when internal efforts stall, Retrievables streamlines the jump to a commercial collection attorney or agency that fits your case—so cash comes home and your team gets back to growth.