Past Due Invoice Explained
A past due invoice is an invoice whose payment deadline has passed without the creditor receiving payment. If an invoice has Net 30 terms and was issued on January 1st, it becomes past due on February 1st if unpaid. At that point, the amount is considered delinquent.
Past due invoices are the starting point of every collections process. The moment an invoice goes past due, the clock starts ticking — and every day of delay reduces the probability of full collection. Industry data consistently shows that recovery rates drop sharply after 30, 60, and 90 days past the due date.
For B2B companies, past due invoices are a fact of life. On average, 10-15% of B2B invoices are paid late. The difference between companies with strong cash flow and those that struggle is not whether invoices go past due — it's how quickly and systematically they respond when they do.
What You Need to Know About Past Due Invoices
- Speed of response is everything. Invoices contacted within 7 days of going past due have 90%+ recovery rates. At 90 days past due, recovery drops below 70%. At 180 days, below 50%.
- Most late payments are not malicious. The top reasons B2B invoices go past due: lost in AP process (35%), cash flow timing (25%), dispute over amount or service (20%), changed contacts (10%), and intentional non-payment (10%).
- Phone calls outperform emails 4-6x for collections. An email reminder is easy to ignore. A phone call creates real-time engagement and accountability. The best collection strategies combine both channels.
- Document everything from day one. Every call, email, and communication about a past due invoice should be logged. This documentation is essential if the matter escalates to legal action.
- Late fees are a tool, not just revenue. Contractual late fees (typically 1-1.5% per month) incentivize on-time payment. More importantly, they provide a negotiation lever — offering to waive late fees in exchange for immediate payment is a powerful tactic.
Past Due Invoice in Practice: B2B Example
Scenario: Accounting Firm
Invoice: $8,500 for quarterly bookkeeping services, Net 30 terms, due March 15.
Day 1 past due (March 16): Automated email reminder sent. "Your invoice #1247 for $8,500 was due yesterday."
Day 7 (March 22): Phone call to the AP contact. Discovers the invoice was never received — re-sent immediately.
Day 14 (March 29): Follow-up call. AP confirms invoice is in the payment queue for next week's check run.
Day 21 (April 5): Payment of $8,500 received. Total time past due: 21 days.
Without follow-up: The lost invoice would have sat indefinitely. The client would not have known it was missing. The $8,500 would have aged to 60, 90, 120 days — becoming progressively harder to collect. One phone call on day 7 saved the receivable.
How AgentCollect Handles Past Due Invoices
Automatic Follow-Up From Day 1
AgentCollect AI agents contact every past due invoice automatically — starting the day after the due date. No invoice is forgotten, no follow-up is delayed, and no account falls through the cracks. The system combines emails and phone calls for maximum effectiveness.
For past due invoices that don't resolve with initial contact, AgentCollect automatically escalates: offering payment plans, increasing urgency of communication, and flagging accounts that need human review for demand letters or legal action. The entire process runs without manual intervention.
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Past Due Invoice FAQ
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