What to Do When a Business Client Won’t Pay: A 30-60-90 Day Plan

What to do when a client won’t pay comes down to a calendar, not a mood: verify the invoice, follow up in writing on a fixed schedule, offer dated terms before the account hardens, send a clear final demand, and place the account with a commercial collection agency once promises stop matching payments. The first 30 days decide most outcomes, and the first 90 days decide most of the rest.

What to do when a client won’t pay: why a plan beats good intentions

Most business owners handle a late invoice the same way: send a reminder, hope it works, and avoid the awkward call. That feels polite, but it quietly hands control to the customer. Your invoice competes with every other bill on the accounts-payable desk, and the vendors who follow up consistently get paid first.

A written schedule fixes that. It tells you what to do on day 1, day 15, day 45 and day 75, it keeps the tone professional because the steps are decided in advance, and it produces a paper trail that helps if the account later goes to an agency or an attorney. The plan below is built for business-to-business invoices. It works for services, products, rentals and subscriptions alike.

Step zero: confirm the invoice is collectible

An agency cannot recover a balance the customer can credibly dispute, and a customer who feels pressured about an invoice with errors will use the errors as the reason not to pay. Before the first reminder, check these items.

• The amount, PO number, billing address and billing contact on the invoice match what the customer ordered.
• You have proof of delivery or completion: a signed receipt, job ticket, approval email or system confirmation.
• Any dispute, short-pay, return or credit request is resolved or documented in writing.
• Your terms are in writing: due date, late-fee clause, and where a dispute would be heard.
• The customer’s legal name is correct. “Acme Plumbing” and “Acme Plumbing Services, LLC” can be different entities.

Also check the customer’s current status. Is the business still operating? Has it been sold or renamed? Has a bankruptcy been filed? If the customer has filed bankruptcy, stop collection contact and talk to counsel. The automatic stay generally bars any act to collect a claim that arose before the filing (11 U.S.C. § 362(a)(6)). Learning this on day 5 instead of day 85 can change what you do next.

Days 1 to 30: friendly, documented follow-up

Most late payments are process problems, not refusals. An invoice went to the wrong inbox, a purchase order number is missing, an approval is stuck with a manager who is on vacation. Treat the first month as a fact-finding exercise with a firm tone.

1. Due date: Send a courteous reminder with the invoice attached. Include the invoice number, amount, due date and how to pay.
2. Day 7 past due: Call the accounts-payable contact, not only the person who ordered the work. Ask one direct question: “What is the payment date?” Then confirm the answer by email the same day.
3. Day 15 past due: Send a second written notice. Ask whether anything is blocking payment, and offer to resend the invoice or supporting documents.
4. Day 25 to 30: Escalate to the owner, controller or person who signs checks. Keep the message short and specific.

Log every call and email with the date, the person you spoke with and what they promised. If a promise is broken, the log is what lets you say so precisely: “On the 12th you told us payment would go out on the 19th.”

A simple reminder you can adapt

“Our records show invoice [number] for [amount], due [date], is still open. Please confirm the payment date, or let us know if anything is needed from us to process it. We have attached a copy of the invoice and the delivery confirmation.”

Days 31 to 60: firm terms and payment plans

If the invoice is still open at day 30, the problem is probably not paperwork. Move from reminders to terms. A customer who cannot pay in full today may still be able to pay on a schedule, and a signed schedule is far better than an open-ended “we’re working on it.”

• Offer a written payment plan with specific dates and amounts, and ask for the first payment now.
• Put the plan in a short signed agreement or an email the customer confirms in writing.
• Pause further credit or shipments if your contract allows it, and tell the customer why.
• Escalate on your side as well. A balance of this size should be known to an owner or senior manager.

A plan the customer signs is evidence that the debt exists and sets a clear standard for what counts as a broken promise. If the customer misses the first payment, you do not need to start over. You move to the next step.

Be careful with a check marked “payment in full” when the customer disputes the balance. Under Texas law, if a customer in good faith tenders an instrument as full satisfaction of a disputed or unliquidated claim and the creditor obtains payment, the claim can be discharged, subject to exceptions (Business and Commerce Code § 3.311). Get advice before depositing a check like that.

Days 61 to 90: final demand

If there is still no payment and no working plan, send a written final demand. State the amount, the invoices it covers, the deadline, and the next step you will take if the deadline passes. Keep it factual and calm. Do not threaten anything you will not do, and do not describe consequences that are not yours to control.

For construction, installation and other lien-eligible work, check statutory lien and notice deadlines separately and early. Those clocks can run out before collection efforts do, and they are not extended by negotiations.

Also keep the limitation period in mind. In Texas, a suit on a debt generally has to be filed within four years (Civil Practice and Remedies Code § 16.004(a)(3)), counted from when the claim accrued. For an open account between merchants, the four years run from the day the dealings cease (§ 16.004(c)). Other states differ. Do not plan around the end of that period, because the older the balance, the harder it is to collect.

When to place the account with a commercial agency

Place the account when any of these happen:

• The customer breaks a payment promise or a payment-plan date.
• The customer stops answering calls and email.
• Ownership changes, the business appears to be closing, or there are signs of financial trouble.
• The invoice reaches your own cutoff, often 60 to 90 days past due, with no working plan.

Send one organized file instead of a pile of attachments: the contract or terms, invoices and statements, proof of delivery, the payment-plan history, and your contact log. A clean file makes the first conversation with the customer shorter and the recovery faster.

Most commercial agencies, including Southwest Recovery Services, work on contingency, so you pay only if money is recovered. Commercial rates commonly run 10%–40% depending on the age, balance and volume of the receivables, and a rate is quoted after reviewing a sample. Ask any agency how it handles disputed, bankrupt and represented accounts before you sign.

Agency, attorney or in-house: choosing the right path

• In-house follow-up fits recent invoices from customers who are responsive and have a clear reason for the delay.
• A collection agency fits undisputed balances where the customer has gone quiet or keeps missing promises, and where you want recovery without up-front legal cost.
• An attorney fits large balances, contract disputes, accounts where suit is the realistic next step, or accounts with competing claims and guarantors.

These are not exclusive. Many creditors start with an agency and move an account to an attorney if it needs a lawsuit, or begin with counsel on a contract dispute and use an agency for routine delinquent invoices.

Mistakes that cost businesses money

1. Waiting for the customer to bring up the invoice first.
2. Following up only with the person who ordered, not accounts payable.
3. Accepting vague promises with no date or amount.
4. Letting the account keep growing by shipping more on open credit.
5. Skipping written confirmation after phone calls.
6. Sending a demand with errors in the amount or the customer’s name.
7. Ignoring lien, notice and limitation deadlines.
8. Waiting until the account is a year old before getting help.

How the timeline looks by industry

The 30-60-90 pattern is a starting point, not a rule. Construction and trades work usually needs earlier attention to lien and notice rights. Healthcare and professional-services billing often involves insurers, authorizations or retainers that need to be sorted before a collection effort. Wholesale and distribution accounts may have credit terms, returns and chargebacks that complicate the balance. In every case, the method is the same: verify, document, escalate on a schedule, and decide on placement before the account gets old.

Frequently asked questions

What should I do when a business client won’t pay an invoice?

Confirm the invoice is accurate and was received, follow up in writing at set intervals, offer a dated payment plan, then send a written final demand. If there is no payment or plan by about 60 to 90 days, consider placing the account with a commercial collection agency.

How long should I wait before sending a business account to collections?

There is no fixed rule, but accounts placed earlier are generally easier to resolve. Many creditors place accounts that are 60 to 90 days past due and no longer responding.

Does the FDCPA apply when a business owes me money?

Generally no. The FDCPA covers debts incurred for personal, family or household purposes, so business debts fall outside its definition of debt. State law and your contract still govern. The Texas Debt Collection Act (Finance Code Chapter 392) is limited to consumer debts, so it does not reach a commercial account.

Can I charge a late fee or interest on an unpaid business invoice?

Late fees and agreed interest should be in your written terms before the sale, not added after the invoice is overdue. Where nothing was agreed, some states set a default rate. In Texas, a creditor that has not agreed to charge interest may charge legal interest of six percent a year beginning on the 30th day after the amount is due (Finance Code § 302.002). Check the rule in your state before you add either to a balance.

What documents should I gather before placing an account?

The contract or terms, invoices and statements, purchase orders or approval emails, proof of delivery or completion, any payment-plan agreement, and a log of your calls and emails.

What if the customer says the invoice is wrong?

Ask for the dispute in writing, identify exactly which line or amount is contested, and resolve or credit what is wrong. Collect the undisputed portion. A clear, documented dispute is easier to resolve than a vague one left open.

Does it cost money to place a commercial account with an agency?

Most commercial agencies, including Southwest Recovery Services, work on contingency, which means no recovery, no fee. Percentages depend on the age and size of the balance, so ask for the rate before you place the account.

What if the customer files bankruptcy?

Stop collection contact and speak with counsel. A bankruptcy filing generally stops collection efforts on pre-filing debt, and you may need to file a proof of claim. Keep your documents organized either way.

This article is general information, not legal advice. Laws vary by state and change over time; confirm current requirements and your own facts before relying on any point here.