What To Do When a Client Won't Pay Their Invoice

Stop sending polite follow-ups. You've already sent three. If a B2B client hasn't paid after 30 days and two reminders, politeness is no longer a strategy — it's a signal that there are no consequences. Here's exactly what to do next, in the order that works.

You've been here before. The invoice is overdue, the emails disappear into silence, and you're wondering whether to chase harder or give up. You're not alone — 55% of all B2B invoices are paid late, and the average costs businesses $39,400 per year in delayed cash flow. We'll walk you through the five steps that recover the money, starting with the one most companies skip.

1. Send a formal payment demand — not another friendly reminder. A structured letter referencing your contract terms, the exact amount owed, the due date, applicable late payment interest (under the EU Late Payment Directive, that's the ECB rate + 8%), and a 14-day deadline. This is the step most companies skip. They keep sending casual emails. A formal demand changes the legal and psychological dynamic.
2. Separate disputes from delays. If the client suddenly raises a quality issue three months after delivery, that's rarely a coincidence. Respond to the dispute in writing, formally, but separate the disputed amount from the undisputed balance. If they owe €50,000 and are disputing €5,000, the other €45,000 is not under discussion.
3. Calculate your internal cost of chasing. If your CFO spends three hours per month on a single overdue account — calls, emails, internal meetings — that's executive time with a real hourly cost. Multiply across five overdue accounts and you've found a hidden line item that never appears in your P&L.
4. Engage a professional collection agency. Not as a threat — as a process. The psychological shift when a third party enters the picture is measurable. Our data shows that 68% of amicable collections resolve within 45 days of first professional contact. The debtor knows the dynamic has changed.
5. Set a decision deadline for legal escalation. If amicable collection hasn't produced results within 60-90 days, you need a clear go/no-go decision on legal proceedings. A good agency will give you an honest assessment of costs, timeline, and probability before you commit a single euro to litigation.

This depends on your jurisdiction, but the clock is always running. In most EU countries, the statute of limitations for commercial debts is 3-6 years. In the UK, it's 6 years. In the UAE, it's shorter.

But the real deadline isn't legal — it's practical. Recovery rates drop from 94% at 30 days overdue to 73% at 90 days. By six months, you're looking at coin-flip odds. Every week of inaction costs you money.

Yes. Under the EU Late Payment Directive (2011/7/EU), you're automatically entitled to interest at the ECB reference rate plus 8 percentage points, plus a minimum €40 compensation per invoice. You don't need to negotiate this into your contract — the right exists by law.

Most companies never exercise it. The ones that do systematically tend to get paid faster over time, because delaying your invoice is no longer free credit.

When your automated reminders and personal follow-ups haven't worked within 30-45 days, and you're spending senior people's time on an activity that isn't their expertise. The decision isn't emotional — it's arithmetic. Professional collection fees are a known cost against a probabilistic recovery. Internal chasing is an unknown cost against a declining probability.

Most B2B collection agencies work on contingency — no win, no fee. Typical fees range from 5-25% of the recovered amount, depending on the debt's age, size, and complexity. Compare that to writing off the entire amount: if your net margin is 10%, you'd need €500,000 in new sales to replace a €50,000 write-off.

You already know which invoice you were thinking about when you clicked on this. The question isn't whether to act — it's how much of the original amount you'll recover, and that number is getting smaller every day.

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