• Before you escalate
  • The escalation path

To follow up on an unpaid invoice, move through a set of steps, each one firmer than the last: reminders, a direct call, a statement of what's owed, an offer of a payment plan, a final notice with a date, and only then outside help. Write down every contact as you go. A clear record shows what was asked for, what was promised and what was paid, and you'll need it if the debt goes further.

Billed publishes this page. This is general information, not legal advice. Rules on late fees, interest, collection and court claims vary by place, so check local rules and ask a lawyer before you rely on any of them.

This page covers what to do after the first reminders. For writing the reminders themselves, see how to write invoice payment reminders. For when an invoice counts as overdue, see what is an overdue invoice. If the client says the invoice is wrong, see common invoice disputes and resolutions before you escalate.

Before you escalate

  • Check the invoice. Confirm the amount, due date, PO number and billing address are right, and that it went to the person who pays invoices.
  • Check for a payment. Look for a payment you haven't matched, including a partial one. See how to handle partial payments.
  • Check your terms. Reread the due date and any late fee terms in your agreement. See invoice payment terms explained.

The escalation path

1. Reminders

Send reminders on the schedule in your terms, each with the invoice number, amount, due date and a way to pay. The reminders guide has sample wording.

2. A call, or a different contact

If reminders get no reply, call. Ask who approves and pays invoices, and whether they have everything they need. If your contact can't help, ask for the accounts payable contact and send the invoice there.

3. A statement of what's owed

Send one message that sets out the full position in writing.

Template:

Subject: Statement for Invoice [number], [amount] outstanding

Hi [Name],

Here's where Invoice [number] stands. It was issued on [date] for [amount] and was due on [date]. I've received [payments, or "no payments"], so [amount] is outstanding. I've sent reminders on [dates] and called on [date].

Please let me know by [date] when it will be paid, or tell me if there's a problem with the invoice. You can pay here: [payment link].

Thanks, [Your name]

4. A payment plan, in writing

If the client can't pay in full, offer to split the balance. Put the amounts and dates in writing and ask the client to confirm by reply.

Template:

Subject: Payment plan for Invoice [number]

Hi [Name],

Thanks for talking this through. As discussed, the [amount] outstanding on Invoice [number] will be paid in [number] payments of [amount], due on [dates]. Please reply to confirm, and I'll send a note when each payment arrives.

Thanks, [Your name]

5. A pause on new work, if your agreement allows it

Pausing new work can limit what you're owed, but whether you can do it depends on your agreement and the law that applies to it. Read your contract first, and ask a lawyer if it's unclear.

6. A final notice with a date

Give one clear deadline and say what you'll do next if it passes. Only name a step you're prepared to take and are allowed to take where you and your client are.

Template:

Subject: Final notice: Invoice [number], [amount] outstanding

Dear [Name],

Invoice [number] for [amount] was due on [date] and remains unpaid, despite reminders on [dates], a call on [date] and a statement on [date].

Please pay [amount] by [date]. If it isn't paid by then, I'll [next step, such as referring the debt for collection].

I'd prefer to settle this directly, so please contact me at [phone or email].

Regards, [Your name]

7. Outside help

If the final date passes, the options include a collection agency, a claim in small claims court, or a letter from a lawyer. Who can collect, what they can charge, the court's limits and the deadlines for a claim all depend on where you and your client are. Check local rules and ask a lawyer before you choose. If you decide the debt won't be paid, the tax side is covered in common invoice disputes and resolutions; ask your accountant.

For late fees and interest, see late payment policies and how to add late fees to invoices. Whether you can charge them depends on your agreement and the rules where you and your client are; check local rules before you charge them.

Keep a follow-up log

For each unpaid invoice, record every contact:

  • Date of the contact.
  • Channel: email, phone, letter or in person.
  • Who you spoke to or wrote to.
  • What was said or sent, with a copy of any email or letter.
  • Any promise the client made, with its date.
  • Any payment received, with the amount and date, and the balance left.

Keep the log with the invoice, the agreement and any proof of delivery. If you later talk to a lawyer, a collection agency or a court, this is the record they'll ask for.

Worked example: one invoice's follow-up log

The business, client and figures here are a sample, invented for this example.

A consultant's Invoice 1187 for $2,400.00 was due on September 15.

  • September 22 (7 days past due): reminder email, no reply.
  • October 1 (16 days past due): call to the client's office manager, who says the invoice hasn't been approved. The consultant sends it to accounts payable the same day.
  • October 6 (21 days past due): accounts payable says it can't pay in full this quarter. The consultant offers 3 payments of $800.00, due October 10, November 10 and December 10. The client confirms by email.
  • October 10: $800.00 received. Balance: $2,400.00 − $800.00 = $1,600.00.
  • November 10: $800.00 received. Balance: $1,600.00 − $800.00 = $800.00.
  • December 10: $800.00 received. Balance: $800.00 − $800.00 = $0.00.

Check: 3 × $800.00 = $2,400.00, the invoice total. Days past due count from the due date: September 15 to October 1 is 16 days.

Where Billed fits

Billed's invoice software page says: "Set a due date on each invoice so your client knows when to pay. Invoice reports show which invoices are paid, partially paid or past due, and you can see who owes you money and send them a payment reminder. Payment reminders can be customized." Billed's home page says you can "Create Recurring Invoices, setup scheduled payments and send automated payment reminders."

For your records, the invoice software page says "Billed keeps the complete history of an invoice and its payments from the moment it is created", and lists "Invoice Chat Talk to your client about an invoice in one place, without leaving your dashboard." It also says: "When a client pays by check or cash, record it as an offline payment so all your income is in one place."

To make paying quicker, the same page says: "Connect your Stripe account and every invoice you send gets a pay button, so clients can pay by card." See accept payments. For clients you bill regularly, see recurring invoices.

How to cut down on unpaid invoices

When this guide isn't for you

This guide is for freelancers and small businesses chasing their own invoices. If the amount is large, the client disputes the debt, or you're considering a lawsuit or a collection agency, ask a lawyer. If you sell to consumers, other rules can apply to how a debt is collected.

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Frequently Asked Questions

What should I do after payment reminders don't work?

Call the client and ask who approves payment, then send a written statement of what's owed. If they can't pay in full, offer a payment plan in writing. If that fails, send a final notice with a date before you look at outside options.

Should I keep a record of follow-ups on unpaid invoices?

Yes. Record the date, channel, person, what was said or sent, any promise and any payment for each contact. Keep the record with the invoice and your agreement.

Can I charge a late fee on an unpaid invoice?

It depends on your agreement and the rules where you and your client are. Check local rules, and ask a lawyer if you're unsure.

Can I stop work for a client who hasn't paid?

It depends on your agreement and the law that applies to it. Read your contract first, and ask a lawyer before you pause work.

When should I use a collection agency or small claims court?

After your own follow-up and a final notice with a date haven't worked. The rules on collection and court claims vary by place, so check local rules and ask a lawyer first.

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