8 actionable tips to collect past due invoices faster

You’ve done the work. You’ve sent the invoice. But where is the payment? Chasing down past due invoices isn’t just frustrating, it can disrupt your cash flow and eat into your time. The good news? You don’t have to stay stuck in the cycle.

In this guide, you’ll learn 8 actionable tips to collect past due invoices faster, without damaging client relationships.

What are past due invoices?

Past due invoices (overdue invoices) are invoices that your customers haven't paid by the agreed due date.

Lots of people are confused about outstanding invoices and past due invoices. Are they the same? Not exactly. Outstanding invoices simply mean they're unpaid, but they aren’t overdue until they pass the payment deadline (payment terms).

The longer an overdue invoice remains unpaid, the higher the risk it could become a bad debt you never collect.

When do invoices become past due?

Invoices officially become past due the moment they exceed their payment deadline. Most businesses set standard payment terms (often 15, 30, 60, or 90 days) from when the invoice was issued.

For example, if your invoice states “Net 30” terms, it means your customer should pay within 30 days. If the 30th day passes without payment, that invoice instantly becomes past due.

8 actionable tips to collect past due invoices faster

Collecting overdue invoices faster requires a proactive and organized approach to accounts receivable. Here are strategies to accelerate collections:

1. Schedule past due invoice email reminders
2. Call your clients if follow-up emails don’t work
3. Have consequences for past due invoices
4. Collect overdue payment immediately using Virtual Terminal
5. Offer a recurring online payment option
6. Create an installment payment agreement to split up overdue invoices
7. Prioritize and target large past due invoices
8. Collect milestone payments for future projects

1. Schedule past due invoice email reminders

Don’t wait until an invoice is overdue to start following up. A friendly reminder a few days before the due date helps keep the invoice top of mind. If the client still doesn’t pay, send a gentle overdue email the day after the due date passes.

From there, follow a clear schedule, you can schedule a second automatic payment reminder a week later. Then, continue with follow-ups every few weeks or monthly, depending on your payment terms.

2. Call your clients if follow-up emails don’t work

Sometimes, your follow-up emails slip through the cracks because your client’s inbox is packed. If they haven’t responded to your follow-ups, pick up the phone and give them a call. Stay professional and polite, but be clear: the invoice is overdue, and you need payment right away. A quick conversation can often resolve what emails can’t.

3. Have consequences for past due invoices

Many businesses charge late fees or interest on past due invoices. For example, a 1.5% per month interest charge, or a flat fee like $25-$50. A polite reminder about these extra charges often encourages clients to pay sooner rather than later.

If you offer ongoing services, let your client know that those services may be paused until the overdue invoice is paid. When there’s a clear cost to missing a payment, clients tend to act faster.

4. Collect immediate payment using Virtual Terminal

Some invoicing software makes it easy to collect overdue balances by using saved payment details. For example, with Helcim Invoicing software, once a client pays their first invoice, their payment information (except sensitive data like CVV or PIN) is securely stored. This allows you to quickly charge outstanding balances with Helcim Virtual Terminal if a client fails to pay on time. Just be sure to outline this process in your contract or get written consent upfront so there are no surprises or disputes later.

5. Offer a recurring online payment option

If a client receives your services regularly and often pays late, it’s worth setting up a recurring payment plan. With recurring payments, you only need to set it up once, then the system will automatically collect payment on a schedule you choose, weekly, bi-weekly, and monthly, etc.

For example, Helcim Recurring Payments lets you automatically collect ACH bank transfers, credit card, or debit card payments. It’s simple and helps reduce the risk of overdue invoices piling up.

6. Create an installment payment agreement to split up overdue invoices

Sometimes clients have genuine cash flow issues. You can consider offering an installment arrangement to break the overdue invoices into smaller chunks so they can pay over time. This can increase the chance of collecting the money. It’s slower, but it’s better than nothing.

7. Prioritize and target large overdue accounts

If you have multiple past due invoices, focus on the ones that are most critical, either the largest amounts or oldest debts. The longer the invoices stay in the overdue zone (the danger zone is 60-90 days), the harder it is to collect. In fact, once an invoice hits 90 days past due, only about 18% of past due invoices are paid. If there is a large amount of invoices recently gone overdue, you should target those first until it’s too late.

You can use the aging receivables report to have a clearer view. It shows how many invoices, and how much money, sit in each overdue bucket. That way, you can tackle the right accounts before they slip too far behind.

8. Collect milestone payments in future projects

Chasing overdue invoices is exhausting, and you don’t have to do it forever. If late payments are common in your industry, consider using milestone payments in future projects. Breaking your work into phases with payments tied to each stage helps you get paid over time. If they miss a payment, it's only a small amount, not the entire project cost. Smaller payments are easier on your client’s cash flow too, so they are more likely to be paid on time.

What are the reasons for past due invoices?

Invoices can go past due for many reasons. It can be an honest mistake or a sign of deeper problems. Understanding why clients pay late can help address the root cause. Common reasons include:

1. Administrative issue: The invoice might get lost in someone’s inbox or sent to the wrong department. Companies also often use corporate cards with set spending limits for invoice payments. If a client miscalculates their spending and hits the limit, the payment may not go through.
2. Client cash flow problems: Some industries, like automotive or retail, have high operating costs. If those businesses don’t manage their cash flow carefully, they may struggle to pay all their bills on time. In these cases, your invoice might fall to the bottom of the list.
3. Confusion over payment terms: Clients may forget the due date or not realize there’s a late fee. If they think they have more time than they do, they might not treat the payment as urgent. Make sure to remind them of payment terms, and the consequences for missing the deadline when you send out invoices and payment reminders.
4. Incorrect invoice detail: Clients often hold off on paying if something’s wrong with the invoice, like the amount, product quantity, business information, or line items. They’ll usually request a correction and won’t pay until it’s fixed. That’s why it’s important to double-check your email for revision requests that could be blocking your payment.

How long should you wait for a client to pay an overdue invoice?

In general, you should not wait long at all once an invoice becomes overdue, it’s best to follow up immediately or within a day or two.

• In the first 1-7 days: You can assume they just forgot the due date. A friendly email along the lines of, “Just a reminder that your invoice was due on Date; please let me know if there are any issues processing this payment,” is appropriate.
• 1–2 weeks overdue: If a week passes with no payment, follow up again. You can be a little more direct while staying polite. This is also a good time to try calling if they haven’t responded to emails.
• 30 days overdue: Once the invoice is a month late, you should clearly state that it’s 30 days overdue and needs urgent attention. This is often when you mention that failure to pay could result in paused services or halted deliveries.
• 60 days overdue: At two months overdue, you can send a final warning email stressing that the account is significantly past due (60+ days) and that you will consider external recovery options if payment isn’t received promptly.
• 90 days overdue: After three months, the chances of collecting overdue invoices decreases by 60% . At this point, you should treat the debt as highly delinquent. You can consider a collection agency or legal action if the invoice amount is too large to ignore.

How to politely ask a customer to pay past due invoices

You should always open your communication with a polite tone. Phrases like “just a friendly reminder” or “for your convenience, I’m resending the invoice” help keep the conversation respectful.

Polite doesn’t mean vague. Be clear from the very first line. For example: “This is a reminder that invoice #12345 (amount $X) is past due as of (date).” Being upfront helps the client immediately understand what the message is about.

In your first overdue reminder, it’s safe to assume the client has good intentions. You can frame it as a simple oversight: “I’m sending a quick reminder in case it slipped through the cracks. Please let me know if you need another copy or have any questions.”

If you need to send a second or third reminder, it’s okay to be more direct, but remember to stay professional. For example, “this invoice requires your immediate attention.” To show that you’re open to working with them if there’s a problem, include something like: “If you’re experiencing any issues with the invoice or payment process, please let us know.”

The tone can be firmer at 60+ days overdue. You can treat it as a final notice before further legal escalation. For example, “Please be advised that if we do not receive payment by (date), we will need to consider further legal action.”

Overdue invoice email templates

1. Friendly first reminder

Subject line: Quick reminder - Invoice [Invoice Number] was due on [Date]
Hi [Client Name],
Hope you’re doing well. Just a quick reminder that invoice #[Invoice Number] for [Amount] was due on [Date]. If you’ve already sent payment, please disregard this note. Otherwise, please let us know if you need another copy of the invoice or have any questions.
Thanks so much for your attention to this!

2. Firmer second reminder

Subject line: Action required - Invoice #[Invoice Number] now [X] days past due
Hi [Client Name],
Following up on invoice #[Invoice Number], which is now [X] days past due. Could you please let us know the status of this payment? If there are any issues, we’re happy to help sort them out.
Thanks in advance for your prompt response.

3. Final notice before escalation

Subject line: Final notice - Invoice #[Invoice Number] is [X] days overdue
Hi [Client Name],
This is a final reminder that invoice #[Invoice Number] for [Amount] is now [X] days overdue. To avoid late fees or disruption of services, please arrange payment by [Specific Date].
If you have any concerns or need to discuss a payment plan, please reach out today. We value your business and want to resolve this promptly.

What happens if a customer doesn’t pay a past due invoice?

If a customer still does not pay despite multiple reminders, you can draft a Letter Before Action (LBA) to let them know that you plan to take legal action. It’s the last warning to your clients. If they still don’t pay, you have some choices:

1. Escalation to collections or legal action

If the client doesn’t respond despite the LBA, you can hire a collection agency to recover the debt, but they may take 25% to 50% of the invoice amount as commission. Alternatively, you can take legal action, but it costs time, cost, and no guarantee of success, especially if the client can’t pay. Overall, only use this option for larger unpaid invoices that are worth the cost to recover.

2. Write-off bad debt

For smaller invoice amounts that aren’t worth the effort of recovery or legal action, you may want to write off the invoice as bad debt. This means you accept it won’t be paid and record it as a loss. Many businesses do this after 90 to 120 days of non-payment. Writing it off can save you time, reduce stress, and offer a tax deduction, depending on laws. At some point, cutting your losses is the smarter move.

3. Cut ties with non-paying clients

If a customer refuses to pay and won’t respond, it’s time to end the relationship. You should stop all of your work and services. That doesn’t mean there are no consequences for the client. If you involve a collection agency or obtain a court judgment, the debt may be reported to credit bureaus. This will hurt their credit score and reputation of the clients.

Automate your billing with Helcim Recurring Payments

If you offer recurring services, there’s no need to chase down payments every billing cycle. With Helcim Recurring Payments, you can set up automatic billing for invoices, subscriptions, payment plans, and more.

You can collect debit, credit, and ACH payments. Set a custom billing cycle (weekly, bi-weekly, monthly, etc.), add setup fees, or offer free trials. Everything is easy to set up in just a few minutes.

FAQ

How long after the due date does an overdue invoice become a bad debt?

Many businesses consider an invoice bad debt after 90 to 120 days of non-payment, especially if multiple collection attempts have failed. By that point, the chances of getting paid drops significantly. Some companies may write it off sooner for smaller amounts. While you can still try to collect, it’s often better to move on and record the loss.

How should you handle a client who consistently pays late?

Start by tightening your payment terms, like requiring deposits or shortening due dates. Charge late fees if allowed, and don’t hesitate to pause services until invoices are paid. If late payments continue, consider moving them to a prepaid-only basis. Sometimes, ending the relationship is the best way to protect your cash flow.

Should you escalate an overdue payment to a debt collection agency?

Yes, if the invoice is severely overdue (usually 90+ days), and the client isn’t responding. A collection agency can pursue payment on your behalf, though they typically take a percentage of what they recover. It’s a good last resort when all other efforts have failed. Just be prepared—it likely means the business relationship is over.

What happens if an invoice is not paid after 30 days?

At 30 days overdue, an invoice is considered seriously past due, and your chances of getting paid on time start to drop. This is often when businesses send a firmer reminder, apply late fees if their terms allow, or even pause services until payment is made. It’s also a signal to monitor the account more closely so the debt doesn’t slip into the 60 or 90-day zone, where collecting becomes much harder.