How to Collect Unpaid Invoices: 10 Steps to Get Paid

To collect unpaid invoices from customers, confirm the balance and due date, resend the invoice, and ask for a specific payment date. If payment still does not arrive, resolve any billing dispute, consider a written payment plan, and evaluate formal recovery options. Document each conversation so your next step is supported by a clear record.

Late payments are a common cash flow problem. According to Intuit QuickBooks’ 2026 Small Business Late Payments Report, 59% of businesses say at least some of their invoices are overdue by 30 days or more. A consistent follow-up process helps you spot delays early and decide which accounts need personal attention. This guide explains how to collect unpaid invoices from customers, choose the next action when a balance remains unresolved, and reduce future payment delays.

For QuickBooks Online users, QuickBooks Payments can support that process by helping businesses send online invoices, accept payments directly from the invoice, offer card and ACH payment options, and keep payment activity connected to accounting records.

Unpaid invoices vs overdue invoices

An unpaid invoice has an outstanding balance, but it may still be within the agreed payment period. Overdue invoices, also called past due invoices, have an unpaid balance after the payment deadline has passed.

For example, an invoice issued on October 1 with an October 15 due date is unpaid while you wait for payment. If the balance remains outstanding after October 15, it becomes overdue. A reminder before the deadline helps prevent a delay; collection follow-up addresses a payment that is already late.

1. Confirm the invoice is overdue and the balance is correct

Before contacting the customer, check the original payment terms, due date, and amount outstanding. Review your records for partial payments, credits, refunds, or payments that have been submitted but have not yet appeared in your accounting system.

Also confirm that the invoice reached the correct person. Your contact may have approved the purchase, while a separate accounts payable team handles payment. A missing purchase order number or incorrect billing address can hold up an otherwise valid invoice.

Example: If a customer has paid $600 toward a $1,000 invoice, your reminder should request the remaining $400. Asking for the full amount creates confusion and gives the customer another issue to resolve before paying.

2. Gather the documents supporting the unpaid balance

Keep the records supporting each overdue account together. You may need them to answer a billing question, negotiate a payment plan, or explain the balance to a collection agency or attorney.

Useful records include:

• The signed contract, accepted estimate, or purchase order
• The invoice and any revised versions
• Delivery confirmations, timesheets, or evidence that work was completed
• Customer approvals and relevant correspondence
• Partial payments and credits
• A dated record of reminders, calls, and payment promises

Example: A retailer collecting payment for a bulk merchandise order should be able to connect the invoice to the approved order, delivery record, and agreed payment terms. That is more useful than relying on the invoice alone.

3. Resend the invoice with a polite payment reminder

Your first overdue-payment message should make it easy for the customer to act. Include the invoice number, remaining balance, original due date, invoice copy, and payment instructions. Ask the customer to contact you if there is a billing issue.

Include a clear payment link when available. If the customer pays through a vendor portal or requires a specific submission process, confirm that you have completed those steps.

Friendly overdue-invoice email

Check the payment status before sending another reminder. Repeated requests after a customer has paid can undermine an otherwise professional collection process.

4. Contact the customer and request a payment date

If the reminder receives no response, call the customer or contact the person responsible for approving payment. Ask whether the delay comes from missing paperwork, a billing dispute, an internal approval process, or a cash shortage.

A vague promise such as “we’ll pay soon” leaves you without a useful follow-up date. Ask for a specific date and confirm the agreement by email afterward.

Phone script for an overdue invoice

Example: If the customer says the invoice is waiting for approval, ask who needs to approve it and whether you can supply anything that person needs. If payment is promised for Friday, schedule your next check for that commitment.

Follow-up after a missed payment commitment

5. Resolve billing disputes and missing paperwork

If a customer leaves an invoice unpaid because of a dispute, ask them to identify the specific charge, product, or service they question. Review the contract, estimate, purchase order, delivery records, and prior approval emails before responding.

Correct legitimate errors quickly and explain what changed. If only part of the invoice is disputed, ask whether the customer can pay the undisputed portion while you resolve the remainder.

Example: A customer disputes a $150 delivery charge on a $2,000 invoice. Check whether the charge was agreed to and discuss payment of the other $1,850 while reviewing the disputed amount.

Pause routine reminders for an account you are actively investigating so the customer does not receive conflicting messages. Record the resolution and update the invoice or balance when necessary.

6. Agree on a written payment plan when appropriate

A payment plan may help when the customer acknowledges the debt but cannot pay the full amount immediately. It can be worth considering before outside collection if the customer communicates consistently and proposes payments they can realistically make.

Put the agreement in writing. Include the outstanding balance, installment amounts, due dates, payment method, treatment of any agreed fees, and what happens if a payment is missed.

Example: For a $1,200 balance, you might agree to three $400 installments on specified dates. Record each payment against the original balance so both sides can see what remains due.

If you use automatic charges, obtain the customer’s authorization for the agreed schedule. Access to a saved payment method does not replace permission to use it for a new payment arrangement.

A payment plan is less useful when the customer will not acknowledge the balance or repeatedly misses commitments. In those situations, review your recovery options rather than continually extending deadlines.

7. Review whether late fees apply

Before adding a late fee, check the original agreement and the rules that apply to the transaction. Do not assume a particular monthly percentage is permitted for every business, customer, or state.

State laws, contract terms, and the type of debt can affect whether you may charge a fee and how it must be disclosed. Ask a qualified professional to review your policy if you are unsure.

If a fee applies, show it separately and explain how it was calculated. A customer should be able to distinguish the original balance from additional charges.

Example: If your agreement includes an enforceable late-payment provision, reference that provision in your notice. If it does not, avoid adding a new penalty simply because the invoice has become overdue.

8. Send a final written payment demand

If reminders and direct contact have not resolved the balance, send a formal written demand. State the amount owed, original due date, prior attempts to resolve the matter, payment deadline, and next action you intend to consider.

Use a delivery method that lets you keep a record. Before using the letter as a step toward legal action, check applicable notice requirements with a local attorney or official court resource.

Do not present a collection action as a threat unless you are prepared to follow through.

Final payment-demand example

This example is a starting point for a business payment request. Have it reviewed before relying on it to meet a legal notice requirement.

9. Evaluate a collection agency

A collection agency may be appropriate when your internal follow-up has failed, and the outstanding balance justifies the cost. Before assigning an account, compare the agency’s fees, experience with your type of debt, licensing where required, and approach to customer communication.

Ask whether the agency charges a percentage of recovered funds, an upfront fee, or both. Also ask what happens if it cannot collect, whether legal action requires your approval, and how recovered payments are reported and transferred.

Compare the likely recovery after fees with the time and expense of continuing your own collection efforts. An agency’s involvement does not guarantee payment.

Keep the documents from step two ready, including any dispute history. The agency needs an accurate explanation of the balance and what you have already done to recover it.

10. Consider small claims court or legal advice

Small claims court may be an option for an unpaid balance that falls within your state’s claim limit. Check an official state or local court website for filing requirements, fees, service procedures, and rules for business claimants.

Get legal advice when the amount exceeds the small claims limit, the customer disputes the contract, the agreement requires arbitration, or the case involves other complications. Nonpayment of an invoice may require more than showing that you sent a bill. Your supporting records matter.

Also consider whether recovery is practical. Winning a judgment does not guarantee payment, and you may need additional enforcement steps. For example, the Superior Court of California, County of San Diego, explains that the court does not collect the judgment for you.

A formal unpaid invoice collection process may include a demand letter, a third-party agency, or legal action. Nonpayment disputes can involve contract terms and state law, so this article should not be read as legal advice.

Suggested timeline for collecting past due invoices

A consistent schedule helps you decide how to collect past due invoices without improvising every message. Use this as a starting point, then adjust it for the balance, customer history, disputes, and missed commitments. These are suggested business follow-up intervals, not deadlines that should be set in stone.

Do not wait for a particular aging milestone to fix an error or investigate a dispute. Equally, a responsive customer meeting an agreed installment schedule needs different follow-up from one who ignores every request.

How to recover unpaid invoices: Choosing the next action

The right action depends on why payment has stalled. Before spending more money on recovery, identify the problem you are trying to solve.

Invoice factoring should be considered separately. It involves selling receivables to a factoring company and depends on that company’s eligibility requirements. It should not be presented as a routine way to recover a disputed or seriously delinquent invoice.

Using QuickBooks Online and QuickBooks Payments for invoice follow-up

QuickBooks Online provides invoice creation, status tracking, and payment reminders. QuickBooks Payments is Intuit’s customer-payment acceptance product, which lets customers pay enabled invoices using credit and debit cards, ACH bank transfers, Apple Pay, PayPal, and Venmo. Online payments are automatically recorded in QuickBooks Online. Processing fees apply.

For an existing QuickBooks Online user, the workflow is straightforward: check the invoice and balance, send a reminder, let the customer pay through the invoice, and confirm the payment in your records. Automatic reminders can be scheduled before or after the due date for invoices you have already emailed. Personalize follow-up when an account has a dispute or a missed payment commitment.

These tools support routine follow-up and payment acceptance. A customer who disputes the charge or cannot pay still needs direct communication and an appropriate resolution.

Money movement services are provided by Intuit Payments Inc., licensed as a money transmitter by NYDFS.

How to prevent unpaid invoices

Once you have addressed overdue balances, use the patterns you found to improve future billing. Repeated missing purchase orders, approval delays, or requests for different payment methods point to specific changes you can make.

Set clear payment terms before work starts

Many late balances begin as a misunderstanding, not an outright refusal to pay. If a client never agreed in writing to a due date, late fee, or deposit requirement, it is harder to hold them to those expectations later.

Put your terms in the contract or proposal, not only on the invoice. Include the due date, required deposit or progress payments for larger projects, accepted payment methods, late payment policy, and who to contact with billing questions. A term such as Net 10 or Net 15 gives both sides a fixed deadline. “Due upon receipt” can work for simple transactions, but it leaves more room for disagreement about when payment became late.

For more guidance, read our article on common invoice payment terms.

Send accurate invoices promptly

A missing purchase order number, incorrect billing contact, or vague service description can send an invoice back for correction and add days to the payment cycle. Send the invoice the same day work is completed or as soon as your agreement allows. Before sending, verify the client name, invoice number, itemized charges, due date, tax treatment, and payment instructions.

Be specific in the service description. “Consulting services” can invite questions, while “Website conversion audit, completed June 1 to June 15” gives the customer less reason to delay approval.

Offer convenient payment methods

Some late balances are caused by inconvenience. A client with a company credit card may not want to mail a check, while an accounting department that prefers ACH may need a bank payment option. Offer the methods your customers actually use so they do not need to request an exception or wait for another payment process.

Add a clear payment link to digital invoices when available, and confirm any vendor-portal requirements before billing. Consider an early-payment incentive only if the benefit justifies the reduction in margin.

Use reminders and authorized recurring payments

Automated reminders keep the process moving during busy weeks. You can still personalize messages for high-value or long-term customers, but routine follow-up should not rely on someone remembering to check every open balance.

Autopay goes further by charging an approved payment method automatically for future invoices. It can be a good fit for monthly retainers, subscriptions, and maintenance work, but get clear authorization from the customer. Explain the amount, schedule, cancellation terms, and receipt process in writing.

Read more:

• How to Accept Recurring Payments
• Best Recurring Billing Software

Review accounts receivable regularly

An accounts receivable aging report groups outstanding balances by age, commonly showing current invoices separately from those 1-30, 31-60, 61-90, and more than 90 days overdue. Review it weekly if you invoice frequently, or at least monthly if your volume is lower.

Our guide to A/R aging reports explains how this report can help identify late-paying patterns and prioritize follow-up.

Assign someone to each overdue account and record the next action and date. When payment arrives, apply it to the correct invoice, update the remaining balance, and close or adjust the follow-up task.

Bottom line

Learning how to collect unpaid invoices from customers is less about writing one perfect email and more about running a consistent process. Invoice quickly, set clear terms, make payment convenient, follow up early, and document each step if you need to escalate.

For businesses that already use QuickBooks Online, QuickBooks Payments can be a practical way to combine online invoicing, payment acceptance, reminders, and payment tracking in one workflow. The best system is the one that makes it easier for customers to pay on time and easier for you to spot problems before they affect payroll or supplier payments.