Distributors carry many small and mid-size open accounts, so speed and volume matter. We work accounts the day they are placed, use statements and delivery proof to resolve disputes, and offer payment plans to keep good customers buying.
Why wholesale & distribution invoices go unpaid
- High volume of small balances
- Customers disputing deliveries or pricing
- Accounts that close and reopen under new entities
Built for volume
Upload aging reports by CSV or connect your accounting system, and set rules such as "place every account over 90 days and $1,000."
A distributor with hundreds of open accounts cannot chase each one by hand, and its credit team is usually also setting limits, releasing orders and handling deductions. We take the long tail of small balances so your team can focus on the large customers. Each account is still worked individually, with its own statement, delivery proof and contact history.
How distribution receivables go bad
Distributors sell on open account to contractors, retailers, repair shops and resellers, often on net 30 with a credit limit set at onboarding and rarely revisited. The customer orders weekly, pays the oldest invoice or a round number, and the balance creeps up. Because orders keep shipping, nobody notices until the account is 90 days out and well over its limit.
The other pattern is the sudden stop. A small contractor or retailer loses a big job or a lease, stops paying everyone at once, and closes. Sometimes the same owners open a new company at a different address with a new name and a new credit application. The faster an account is placed after it stops paying, the better the chance of reaching it while it still has cash and inventory.
Typical customer excuses, and our answers
- "We never got that order." We match the invoice to the signed delivery receipt or carrier POD, including who signed and when.
- "That's not the price we agreed to." We pull the price agreement, quote or contract pricing file in effect on the order date.
- "We returned some of it." We check for a return authorization and credit memo. Returns without an RMA are documented and addressed separately from the undisputed balance.
- "We're paying you as fast as we can." We ask for a written plan with dated payments and stop new shipments on credit until it is in place.
- "That was the old company." We check Secretary of State records for the prior and new entities, shared owners and addresses, and any personal guarantee on the credit application.
Guarantees, successor entities and other leverage
Many distributor credit applications include a personal guarantee signed by the owner. When a business closes owing you money, that guarantee is often the main source of recovery, so we verify it was signed by the right person and covers the balance. If a closed company's assets or customers moved to a new entity with the same owners, the new company may be liable for the old debt under successor liability theories, depending on state law and the facts.
For high-volume customers, a UCC Article 9 security interest in the goods you sell, properly filed, can give you a priority position if the customer fails. It takes planning before the sale, but it changes your position in a liquidation or bankruptcy.
Credit controls that stop repeat losses
- Use a credit application with a personal guarantee, terms and conditions, and a collection-cost clause
- Review credit limits every year and whenever monthly purchases change sharply
- Put accounts on automatic credit hold at a set number of days past due
- Run new applications against your closed and collection accounts to catch owners reopening under a new name
- Place accounts by rule at a fixed age instead of case by case
When to escalate a distribution account
For a small balance, a lawsuit rarely makes sense unless there is a signed personal guarantee, an attorney fee clause or real assets to reach. For larger accounts, we recommend suit when the customer is still operating and has stopped engaging, or when a closing business may be moving inventory or receivables out of reach. You get a written recommendation with the expected cost and approve every filing.
Documents that make your claim collectible
- Credit application and personal guarantee if any
- Invoices and statements
- Signed delivery receipts
- Price agreements
Frequently asked questions
Can I place accounts in bulk?
Yes. Upload a CSV or aging report and we create every account automatically.
What does it cost to collect a lot of small balances?
Contingency collection is priced by balance: 30% on balances of $1,000 to $2,999, 25% on $3,000 to $9,999 and 20% on $10,000 to $49,999. Our minimum balance is $1,000, and a flat-fee pre-collection series is available for early accounts.
A customer closed and reopened under a new name. Can you collect from the new company?
Sometimes. If the new entity took over the old company's assets, customers or operations with the same owners, it may be liable under successor liability rules, which vary by state. A personal guarantee is often the more direct route, and we check both.
Should we keep shipping while an account is in collections?
Usually not on credit. Many distributors keep the relationship by shipping cash on delivery while a payment plan pays down the old balance, then restore terms once the account is current.
Can you collect on a returned or NSF check from a customer?
Yes. A bounced check is strong evidence of the debt, and many states add civil penalties for dishonored checks, with rules that differ by state. Place it promptly with the check, the bank return notice and the related invoices.
Where we collect for wholesale & distribution businesses
Owed money by a business?
Place an account in three minutes. No recovery, no fee. Rates from 10%.