Manufacturers usually sell on credit terms to distributors and OEMs, so collections depend on clean documentation: purchase orders, proof of delivery and accepted terms and conditions. We recover past-due balances while respecting ongoing supply relationships.
Why manufacturing invoices go unpaid
- Buyers stretching terms from net 30 to net 90+
- Quality claims raised only after invoices go past due
- Customers in financial distress amid tariff and cost pressure
Goods-specific remedies
Sales of goods are governed by the Uniform Commercial Code, which affects statutes of limitations, acceptance and rejection, and remedies. We review the paper trail early to defeat late quality claims.
Under UCC Article 2 a buyer that accepts goods must pay for them at the contract rate, and a buyer that wants to reject goods has to do so within a reasonable time after delivery and tell the seller. A buyer that keeps and uses the parts, or resells them, will have a hard time claiming later that it never accepted them. The UCC also sets a four-year statute of limitations for most sale-of-goods claims, which the parties can shorten by contract but generally not to less than one year.
How manufacturers get paid, and where it slips
A typical order runs from a credit application and quote to a purchase order, an order acknowledgment with your terms and conditions, shipment, and an invoice on net 30, 45 or 60. Larger customers may also issue a vendor agreement that overrides your terms, and that document often decides who wins a later dispute.
Payment slips at predictable points. The customer's accounts payable team holds the invoice because the PO number or receiving record does not match. A buyer under cash pressure starts paying the vendors it cannot replace and stretches the rest. A quality or shortage claim appears only after the invoice is past due, sometimes as an unauthorized deduction from a later payment. Each of these is easier to fix in the first 60 days than after six months.
Buyer excuses and how we answer them
- "The parts were out of spec." We ask for the inspection report, the date the problem was found and when you were notified, and compare it with your rejection and warranty terms.
- "We're taking a deduction for a shortage." We match the deduction against the signed bill of lading and packing list, which usually shows what was received.
- "Our terms are net 90, not net 30." We check whose terms govern: your acknowledgment, their PO or a signed supply agreement. The battle of the forms under the UCC has specific rules, and the answer is often in the documents.
- "We are waiting for our customer to pay us." Your sale was not conditioned on their downstream sale. We hold them to the agreed terms.
- "Send us a credit for the price increase." We confirm what price was quoted and acknowledged on the order.
Remedies when a buyer is failing
If you learn a buyer is insolvent, the UCC lets you refuse further deliveries except for cash and, in some cases, stop goods already in transit. A seller that discovers a buyer received goods on credit while insolvent may be able to reclaim them by making a written demand within 10 days of receipt, though that right is limited and can be lost to secured lenders.
If the buyer files bankruptcy, goods it received in the 20 days before filing may qualify for an administrative priority claim under 11 U.S.C. 503(b)(9). Keep delivery dates for every shipment so we can identify those invoices quickly.
Credit terms that prevent repeat losses
- Require a signed credit application that incorporates your terms and conditions, including interest on late payments and recovery of collection costs where state law allows
- Print your terms on every order acknowledgment and invoice
- Set credit limits per customer and review them when orders jump
- Consider a UCC Article 9 security interest or letter of credit for large or high-risk accounts
- Put repeat late payers on credit hold or cash in advance after a set number of days past due
Who we collect for
- Component and contract manufacturers selling to OEMs
- Food, packaging and chemical producers selling to distributors
- Machine shops, fabricators and molders
- Equipment builders with milestone or progress billing
Documents that make your claim collectible
- Credit application and terms and conditions
- Purchase orders
- Bills of lading / delivery receipts
- Invoices and statements
- Any quality claim correspondence
Frequently asked questions
The customer says the goods were defective. Can you still collect?
If the goods were accepted and no timely rejection was made, the claim is often still collectible. We document the timeline and push back on late claims.
Can we keep selling to a customer that is in collections?
Yes, and many manufacturers do, usually on cash in advance or tighter terms while the old balance is paid down. We can build a payment plan that pays the old invoices and keeps the account active.
How long do we have to sue for an unpaid invoice for goods?
For most sales of goods the UCC sets four years from the breach, usually the payment due date. Your contract may shorten that period, and claims for services or mixed contracts can follow different state rules, so do not wait until the end.
When should a manufacturing account go to an attorney?
When the buyer is still operating, the debt is documented, and the balance justifies court costs, but the buyer has stopped engaging or broken a payment plan. We send you a written recommendation first, and legal escalation is billed at 30 to 35% contingency plus approved court costs.
Where we collect for manufacturing businesses
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