An invoice reaches its due date without being paid. A few days go by, then other invoices are added. When they aren't tracked regularly, unpaid invoices can quickly weigh on a business's cash flow.
Yet a late payment doesn't always require starting collection proceedings right away. The first step is to identify the unpaid invoice, check the invoice's situation and follow up with the client in a structured way.
So, faced with an unpaid invoice, what should you do? When should you chase the client, and how can you keep late payments from piling up?
What is an unpaid invoice?
An invoice becomes unpaid when its due date has passed without the expected payment being received.
So you need to distinguish between:
- an invoice that has been issued but whose due date hasn't been reached yet;
- an invoice that has reached its due date;
- an invoice that is past due and unpaid.
This distinction matters when organizing reminders.
An invoice due in ten days isn't late yet. However, as soon as the due date has passed with no payment identified, it needs to be checked.
Unpaid invoice: what to do first?
Before chasing the client, make sure the unpaid invoice is real.
- Check the due dateStart by checking the date set for payment. Terms can vary from one client or invoice to another. Misreading the due date can lead you to send a reminder too early.
- Check the payments receivedA payment may have been made without yet being properly matched to the corresponding invoice. Before any reminder, check the available receipts.
- Check the invoice detailsA mistake in the amount, address, contact details or reference can explain the lack of payment. The client may also never have received the invoice properly.
- Identify any disputesPayment may be blocked because the client disputes a service, a product, a quantity or an amount. In that case, sending more and more automatic reminders without addressing the underlying problem is likely to be ineffective.
Once these checks are done, the follow-up can begin.
When should you chase an unpaid invoice?
There is no universal pace that suits every business and every commercial relationship.
The key is mostly to avoid two extremes: chasing too early, when payment is still within the deadline, or waiting several weeks, at the risk of letting delays pile up.
A simple setup can be to plan different levels of follow-up after the due date. For example:
Due date passed by a few days
Check the payment and send a first courteous reminder.
Delay drags on
A new, more explicit reminder.
Payment still missing
Stepped-up handling depending on the situation, the contractual terms and the applicable collection steps.
The aim is to adapt the reminder to how old the unpaid invoice is, rather than treating all invoices the same way.
How do you chase a client for an unpaid invoice?
A good reminder should above all let the client immediately identify the invoice concerned.
It can recall:
- the invoice number;
- its date;
- its amount;
- its due date;
- the payment terms;
- the contact details to use in case of a question or dispute.
For a first reminder, a simple, factual message is generally preferable.
The aim isn't necessarily to assume the client refuses to pay. An oversight, an invoice that wasn't received or an administrative problem may be behind the delay.
If the unpaid invoice persists despite reminders, the tone and the steps taken can then evolve.
How do you prioritize several unpaid invoices?
When only two invoices are late, tracking them stays fairly simple.
The problem changes when unpaid invoices multiply. Not all invoices then have the same level of priority.
How old the unpaid invoice is
An invoice that has been past due for two days isn't in the same situation as one unpaid for two months. How old it is helps distinguish simple delays from cases needing more attention.
The amount
A large unpaid invoice can have a significant impact on cash flow. The amount can therefore factor into how you prioritize reminders.
The client's history
Some clients usually pay their invoices on time and are only exceptionally late. Others regularly accumulate missed due dates. History lets you adjust your level of vigilance.
The number of reminders already sent
An invoice that has already received several unanswered reminders shouldn't be treated like a first delay. Keeping the reminder history also avoids needlessly repeating the same actions.
Which metrics should you track on unpaid invoices?
Tracking unpaid invoices shouldn't stop at a list of invoices. A few metrics give you a better understanding of the situation.
The total amount of past-due invoices
It lets you assess the sum currently outstanding beyond the planned due dates.
The number of unpaid invoices
Two businesses can have the same amount of unpaid invoices in very different situations: a single large invoice for one, several dozen small delays for the other.
How old the unpaid invoices are
It is useful to split invoices by how late they are, for example: recent delay, intermediate delay, major delay. This view lets you quickly spot receivables that are getting older.
The amount per client
Several unpaid invoices may concern the same client. A consolidated view then shows the total exposure tied to that commercial relationship.
Why can unpaid invoices go unnoticed?
The problem isn't always a lack of information. A business may have all the invoices and all the payments it needs, but not review them often enough.
Several situations then make oversights more likely:
- manual tracking;
- scattered data;
- no regular check of due dates;
- a large volume of invoices;
- reminders sent without a centralized history;
- poorly defined responsibilities.
An invoice three days late can thus become an invoice three weeks late simply because no check was made in the meantime.
Regular tracking is therefore as important as the reminder itself.
How do you keep unpaid invoices from piling up?
It's impossible to prevent every late payment. On the other hand, detecting them can be organized much earlier.
Track due dates regularly
Frequent checks let you quickly identify newly past-due invoices. The aim is to avoid discovering unpaid invoices only during a monthly review or a cash flow problem.
Centralize tracking
For each invoice, it helps to be able to easily find:
- its status;
- its due date;
- the remaining amount due;
- the reminders sent;
- any remarks or disputes.
Define a reminder routine
A clear setup prevents the decision to chase from depending solely on one person's memory or availability.
Tracking can, for example, sort invoices by number of days late and plan an appropriate action for each level.
Keep the history
Knowing that an invoice is unpaid is useful. Knowing that it has already been chased twice, that the client replied and that a payment commitment was announced is even more so.
The history helps avoid inconsistent reminders and makes it easier to track cases that drag on.
When is a simple reminder no longer enough?
Not every unpaid invoice gets settled after one reminder.
When amicable reminders have no effect, the situation may call for more formal collection steps.
The right course of action depends in particular on the context, the debtor, the sums involved and the contractual situation.
At this stage, it is important to distinguish the operational follow-up of unpaid invoices from the legal procedures used to obtain payment of a debt.
The stake of day-to-day management remains the same, though: detect delays early enough not to discover a problematic receivable several months after its due date.
How can Gillia help track unpaid invoices?
When invoicing and payment data are available in the same environment, tracking can become much more direct, relying on the documents already managed in Gillia quotes and invoicing.
A merchant can, for example, ask Gillia:
“Which invoices are currently overdue?”
Gillia can identify invoices whose due date has passed and let you focus on missing payments.
Another request could be:
“Which clients are more than 30 days late?”
The analysis then looks not just at whether an unpaid invoice exists, but at how old it is.
The merchant can also ask:
“Which unpaid invoices should I chase first?”
The available information can be used to organize tracking by delay, amount or history.
Finally, this monitoring can become a routine:
“Every morning, identify the new overdue invoices.”
The benefit is moving from occasional checks to regular monitoring of due dates. Also find out how Gillia monitors overdue invoices day to day.
Detect unpaid invoices before they get old
An unpaid invoice isn't necessarily a sign of a conflict with a client.
But the longer the delay grows without follow-up, the harder the situation becomes to manage.
Good management therefore rests on a few simple principles:
check → identify → prioritize → chase → follow up.
Technology doesn't replace the relationship with the client or any steps that may be needed to get paid.
It can, however, keep a past-due invoice from staying invisible for several weeks.
By monitoring due dates regularly, the business can step in earlier and have a much clearer view of its outstanding invoices.