When to send an invoice to collections

Updated 2026-10-24

Most businesses should send an unpaid B2B invoice to collections at 60 to 90 days past due if the customer has not paid or agreed to a written payment plan. Send it sooner if the customer stops responding, breaks a payment promise, bounces a check, changes ownership or disputes without specifics. Collectability drops fast: industry data shows about 74% of commercial debts are collectible at 90 days, but only about 27% at one year.

The short answer: 60 to 90 days

For a typical net 30 account, a reasonable internal process is: reminder before or at the due date, a past-due notice and call in the first 30 days late, a firmer notice and escalation to the customer's owner or controller around 45 days late, a final notice around 60 days late, and placement with a commercial collection agency shortly after the final notice deadline passes. That puts placement somewhere between 60 and 90 days past due.

This window balances two things: giving a legitimate customer enough time to fix a process problem or cash crunch, and not letting the account age past the point where third-party pressure still works.

Write the rule down and apply it the same way to every account. A placement policy that says, for example, that any account 75 days past due without a signed payment plan goes to collections takes the emotion out of the decision. It also stops the common pattern where a salesperson asks for one more week, every week, for months. Exceptions should be approved by someone who owns the receivable, with a date attached.

Why waiting costs money

Commercial debt does not hold its value. Commercial Law League of America collectability figures, published by NACM, put the share of commercial accounts that are collectible at about 94% at 30 days past due, 74% at 90 days, 58% at six months, 43% at nine months and 27% at one year. The longer an invoice sits, the more likely the debtor has moved money elsewhere, taken on other creditors or closed.

Late payment is also widespread. A 2026 QuickBooks report found that 59% of U.S. small businesses had invoices more than 30 days overdue, with an average of about $17,700 owed. If your receivables look like that, a consistent placement rule protects cash flow more than case-by-case judgment calls.

Signs you should act sooner

• The customer has stopped answering calls and emails
• A promised payment date passed with no payment and no explanation
• A check bounced or an ACH was reversed
• The customer disputes the invoice but will not say what is wrong
• You hear about layoffs, closed locations, a sale of the business or new ownership
• Other suppliers are putting the customer on credit hold or filing suits or liens
• The customer asks for more product on credit while the old balance stays unpaid
• The balance is large enough that losing it would hurt your business

When it makes sense to wait a bit longer

Not every late account needs a collector. If the customer is communicating, the delay has a clear cause such as a missing PO number or an approval backlog, and they have committed to a specific pay date, give them the chance to meet it. The same goes for a customer that is paying down the balance on a written plan and sticking to it.

If there is a genuine dispute over quality, quantity or pricing, resolve it first. A collection agency can still help with an account that has a dispute, but a documented, good-faith dispute should be worked through, and the undisputed portion can often be collected separately.

Why relationships are not a good reason to wait

The most common reason businesses hold old invoices is fear of losing the customer. But a customer that is 90 days past due with no plan is already costing you money, and you are probably not shipping them more on credit anyway. A professional commercial collector contacts the debtor in a business-like way, focused on resolution, and many accounts are paid and the relationship continues on tighter terms.

The other quiet cost of waiting is time. Every hour your team spends chasing a debtor who has stopped responding is an hour not spent on customers who pay.

Prepare the account before you place it

• Customer's legal entity name, address, phone and the contacts you have dealt with
• Copies of invoices, statement of account and proof of delivery or completed work
• Signed contract, credit application and any personal guarantee
• Notes on calls, promises and any disputes raised
• Any payments received after your last statement

How placement works with us

We work commercial accounts on contingency, so you pay nothing unless we collect, and our rates are lower for newer accounts, which is another reason to place early. We typically make first contact the same business day, and we report back on what the debtor says, whether a payment plan is realistic and whether the account shows signs of a bigger problem. Once you place an account, route any contact from the debtor to us and tell us right away about direct payments. If an account turns out to need suit, we recommend a local attorney and the expected costs, and nothing is filed without your approval.

Frequently asked questions