Perspectives

The Invoice Is 60 Days Late. What Should You Review Before Calling It a Collections Problem?

A customer’s invoice is 60 days past due. Your team has sent reminders, followed up by phone, and heard that payment is coming.

What happens next?

For many businesses, the answer is built into the aging policy: continue following up, waiting for the next threshold, and eventually send the account to collections. But the age of the invoice is only one part of the picture.

Before deciding how to proceed, take a closer look at the customer, the transaction, your documentation, and the exposure you may still be building. The answers can help you determine whether the account needs a payment conversation, a credit review, legal guidance, or combination of all three.

Start With What Changed

A late payment from a long-standing customer doesn’t always mean the relationship is in trouble. It does mean something may have changed.

Perhaps the customer is waiting for payment on a project. Maybe an invoice is disputed, a purchase order was entered incorrectly, or the person who normally approves payment has left. In other cases, the delay may be part of a larger financial issue.

Look beyond the overdue invoice and ask:

• Is this unusual for the customer, or have payments been slowing over time?
• Are other invoices coming due?
• Has the customer made-and missed-payment promises?
• Has the customer requested more credit or placed additional orders?
• Are they communicating openly, or has it become difficult to reach someone?

A customer who is actively working through a billing discrepancy presents a different situation from one who has stopped responding while the balance continues to grow.

Review the Agreement and the Full Account

Before deciding what to ask for, make sure your team understands what was agreed to.

Pull the credit application, contract, purchase orders, invoices, and any amendments. Confirm the customer’s legal name and look at the payment terms, dispute provisions, and any arrangements concerning fees, interest, or guarantees.

Then review the whole relationship-not just the oldest invoice. Include open orders, pending deliveries, equipment still on rent, and other commitments that could increase your exposure.

A $50,000 overdue balance may look different when another $200,000 in orders is already scheduled to go out.

Put the Documentation Together

An invoice is a starting point. If the customer disputes the balance or the account needs to be escalated, your team may also need to show what was ordered, who ordered it, what was delivered, and where it went.

Gather the records that tell the story:

• Signed agreements and credit documents
• Purchase orders and order confirmations
• Delivery receipts, rental records, or proof of completed work
• Invoices, statements, credits, and payment history
• Emails and notes from customer conversations
• Documents related to any dispute or promised payment

This is also a good time to check for gaps. Sales, operations, and finance may each have information that belongs in the same file. Finding a missing delivery receipt or unresolved complaint now can make the conversation more productive.

Consider the Job Behind the Invoice

If the balance relates to a construction project, the customer’s financial condition is only part of the review. The project may have its own payment issues, documentation requirements, and deadlines.

Confirm the project name and location, whether it is public or private, the owner and general contractor, your customer’s role, and the dates equipment, materials, or services were furnished. If a payment bond may be involved, find out what information your team has.

Depending on the project, your role, and applicable law, there may be notice or claim deadlines that don’t follow your accounts receivable aging schedule. An invoice doesn’t have to reach 90 days past due before a legal deadline deserves attention.

If the project is nearing completion or key information is missing, involve counsel promptly so available options can be evaluated.

Know What Protection You Have

A credit file may reference a guarantee, security agreement, UCC filing, lien, or bond. Before relying any of them, find the actual documents and ask what they cover.

For example:

• Who signed the guarantee, and which obligation does it address?
• What collateral is described in the security agreement?
• Are there filings or other creditors that should be reviewed?
• What project information is available for possible lien or bond claim?

The existence of customer assets does not, by itself, establish your rights in those assets. Security and priority depend on the documents, filings, applicable law, and other facts. A UCC filing is one piece of the review-not a complete answer on its own.

Decide Whether to Keep Studying

One of the most consequential decisions may have nothing to do with the past-due invoice: Will you continue extending credit?

Another shipment, rental period, or order may support an important customer relationship. It may also increase the amount of risk. Before proceeding, bring sales, operations, and finance into the same conversation.

• What is already committed to the customer?
• How much additional exposure would the next order create?
• Is the overdue balance disputed?
• Has the customer proposed a payment plan, and is it documented?
• Are different payment or credit terms worth discussing?

The answer may be different for each account. The goal is to make a deliberate decision with the full balance and relationship in view.

Set the Next Step-and Who Owns It

Once the information is together, decide what needs to happen next. That might mean resolving a billing issue, confirming a payment arrangement, reviewing future orders, or contacting counsel. Set a date for the next review and assign someone to own it. If a payment is promised, document the amount, date, and what the team will do if it does not arrive. If a project deadline may be approaching, don’t leave that question until the next routine aging meeting.

If you learn that the customer has filed for bankruptcy, pause ordinary collection activity and contact counsel as soon as possible. A bankruptcy filing generally triggers an automatic stay that stops most collection activity against the debtor or its property.

Bring WFJ Into the Conversation

Aging reports are valuable. They tell you when an invoice became overdue. Your account file, project information, and customer conversations help tell you what to do next.

Wagner Business Solutions works with businesses on commercial collections, backed by the experience of Wagner, Falconer & Judd. Whether you’re reviewing a difficult account, considering you next collection step, or facing questions about projects and payment rights, our team can help.

Have an account you’re unsure how to move forward with? Contact Wagner Business Solutions to start the conversation.