Past Due Invoices: 7 Steps to Get Paid (Templates & Examples)

Past due invoices are one of the most common cash flow problems in B2B. Even with clear payment terms and good customer relationships, invoices slip past their due dates, reminders go unanswered, and balances that should have been collected months ago are still sitting in your AR aging report.

The difference between finance teams that collect consistently and those that spend months chasing the same balances usually comes down to one thing: having a clear, repeatable cash collection process rather than reacting to each overdue invoice as a one-off problem. Keep reading to know:

• What is a Past Due or Overdue Invoice?

• 7 steps to Avoid Past Due Invoices:

  1. Analyze & focus on your most overdue accounts

  2. Send an overdue invoice email

  3. Set a tempo for your overdue payment reminders

  4. How to Track Past Due Invoices at Scale

  5. Call your past-due accounts

  6. Involve your account managers

  7. Follow up with a past due invoice letter

Need help writing effective payment reminders? Click on the banner below and download our free templates.

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Past Due or Overdue Invoice Meaning

A "past due" or "overdue" invoice refers to a bill that remains unpaid beyond its agreed-upon due date. Businesses typically set standard payment terms such as net 30, 60, or 90 days, though these vary based on client agreements or negotiated payment plans.

Once a payment deadline passes without settlement, the invoice is considered past due and requires follow-up action. The longer it stays unpaid, the harder it becomes to recover, which is why having a structured process matters more than chasing invoices one by one.

For finance teams managing a high volume of accounts, getting visibility into which invoices are past due and by how many days is the starting point. The 6 steps below cover how to do that and what to do next.

1. Analyze & focus on your most overdue accounts

Start with the accounts most likely to go unrecovered if you wait any longer. That means sorting your AR aging report by days overdue and total balance, then working down from the most at-risk.

Most finance teams already know which customers pay late. What they often lack is a current, accurate view of exactly where each account sits: how many invoices are outstanding, the total balance, how many days past due, and whether any reminders have already gone out. Without that picture, collections becomes guesswork.

Your aged receivables report breaks this down by aging bucket: 0 to 30 days, 31 to 60, 61 to 90, and beyond 90. The 61 to 90 day bucket is where most teams underinvest attention. By 90 days, recovery becomes significantly harder. Accounts in that window need immediate action, not another round of automated reminders.

Once you have a clear ranking of your past due accounts by risk, you can build an action plan that matches the urgency to each situation rather than treating all overdue invoices the same way.

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2. Send an overdue invoice email

n about a third of cases, late payments happen because your customer simply forgot. The invoice landed in their inbox, got buried, and nobody flagged it. That is why the first reminder should be low-friction and non-accusatory: you are assuming good faith, not chasing a bad payer.

Send it to the billing contact directly, not to a generic accounts payable address if you can help it. Keep it plain text. HTML emails from billing tools often trigger spam filters or get blocked entirely by corporate email policies. An email from "[email protected]" will almost certainly go straight to trash.

The tone should reflect the relationship and the situation. A first reminder on a 10-day overdue invoice from a long-standing customer reads very differently from a follow-up on a 45-day overdue invoice from someone you have never had trouble with before. Adapt accordingly, but keep it professional throughout.

One thing most finance teams skip: checking whether the email was actually delivered and opened. A reminder that bounced or landed in spam is worse than no reminder at all, because it gives you false confidence that the customer has been contacted. Tools like Mailtrack can help with this if you're doing it manually. If you're managing a higher volume of accounts, AR management software like Upflow tracks delivery and engagement automatically, so you always know which reminders landed and which need a follow-up through a different channel.

The goal of this first email is not just to request payment. It is also to surface any dispute that might be sitting quietly underneath. In many cases where payment is genuinely delayed rather than forgotten, there is an underlying issue: a disputed line item, a missing purchase order, a contact who has left the company. The sooner that surfaces, the sooner it can be resolved.

Here is a template you can use for a first friendly payment reminder:

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3. Set a tempo for your overdue payment reminders

Most overdue invoices do not get paid because the customer decided not to pay. They get paid late because the follow-up was inconsistent. A single reminder sent once and then forgotten is not a collections process.

The principle is simple: once you have sent a first reminder, keep going at a regular cadence until you get either a payment or a response. At least one action per week. That consistency signals to your customer that you are tracking the account closely and that silence will not make the invoice go away.

There are more reasons than you might expect for why a first reminder does not land: the email went to the wrong contact, your billing contact is on leave, the invoice is caught in an internal approval process, or the payment terms were not clear from the start. A structured follow-up tempo accounts for all of this by ensuring the invoice stays visible until it is resolved.

A typical collection workflow looks like this:

If you are managing reminders manually in Gmail, Boomerang lets you resurface emails automatically if there has been no reply. For teams handling more accounts than that approach can realistically support, Upflow lets you set up automated collection workflows that send personalised reminders at each stage, log every interaction, and flag accounts that need manual intervention.

Are overdue payments piling-up? Have a look at our free guide with tips to get paid on time!

4. How to Track Past Due Invoices at Scale

A collections process that works for 20 customers breaks down at 200. The bottleneck is rarely effort. The problem is visibility: without a clear, current picture of which invoices are past due, by how many days, and which customers have a pattern of paying late, follow-up ends up inconsistent and reactive.

Your AR aging report is where this starts. It segments outstanding invoices by how long they have been overdue: 0 to 30 days, 31 to 60, 61 to 90, and beyond 90. That breakdown tells you where attention is most urgent and what action is appropriate at each stage.

Most finance teams know what the right sequence looks like. The problem is executing it consistently across dozens or hundreds of accounts without things slipping. AR automation software like Upflow handles the tracking and follow-up automatically, flags accounts approaching the 90-day threshold, and logs every interaction, so your team can focus on the accounts that actually need human attention rather than manually monitoring the whole ledger.

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5. Call your past-due accounts

Few finance teams do this consistently, but a phone call is often the fastest way to unblock a stuck invoice. An email can be ignored. A call is harder to avoid, and it gives you information that written communication rarely surfaces.

The right moment to pick up the phone is after two or three unanswered email reminders. By then you have a paper trail, which gives you something concrete to reference on the call rather than opening cold.

Come prepared. Have the invoice number, the outstanding balance, the original due date, and the list of reminders already sent in front of you before you dial. If your customer has questions about the invoice details, you want to be able to answer them immediately rather than saying you will follow up. That delay is how calls end without resolution.

Here is a call script you can adapt depending on the situation:

After the call, follow up with a written summary immediately. Even if the call ended with a verbal commitment to pay, getting it in writing protects you and keeps the customer accountable. It also means your accounts receivable management record stays accurate if you need to escalate later. For more on how to run effective collection calls, including scripts for trickier situations, we have a full guide.

If the call uncovers a dispute, treat that as a priority. A disputed invoice that sits unresolved will not get paid regardless of how many reminders you send.

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6. Involve your account managers

The "salespeople should sell, not work on collections" argument is wrong, and most finance teams that have tried to enforce it end up with more write-offs as a result.

By the time an invoice has been overdue for 30 or more days with no response to email reminders and a phone call, the problem is usually not administrative. There is something else going on: a dispute that was never raised formally, a relationship issue, a decision-maker who has changed. The finance team has limited visibility into any of that. The account manager does not.

Involving account managers at this stage is not about shifting responsibility. It is about using the right resource for the situation. Account managers own the customer relationship. They have context the finance team will never have from an aging report, and they have a reason to care: an unpaid invoice is a signal that the relationship may be at risk, which is squarely their problem too.

The cost of not doing this is real. At a 20% gross margin, a single written-off invoice means you need to generate five times that amount in new revenue just to break even on the loss. That number tends to get account managers' attention when you put it to them directly.

At Upflow, we have seen many finance teams successfully turn cash collection into a company-wide priority by building a simple handoff process: finance handles the first three steps, account managers take over when an account goes beyond 30 days without resolution. It removes the ambiguity about who is responsible at each stage and keeps the customer relationship intact while still applying appropriate pressure.

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7. Follow up with a past due invoice letter

If you have worked through all five steps above and still have not collected, a formal letter sent by post is the next move. It carries a different weight than email. Finance and administrative teams open physical mail, and a formal letter signals clearly that the situation has escalated beyond routine reminders.

Sending letters at scale used to mean printing and posting costs. Services like Lob let you schedule and send physical mail online without handling any of it yourself. If you are sending a single letter, a QR code linking to the outstanding invoices saves the cost of printing attachments.

The tone at this stage should be direct. You have been patient, you have followed up multiple times across different channels, and payment is still outstanding. That is worth stating plainly. You can also reference consequences at this point: late fees if your contract includes them, service restrictions, or the possibility of escalating to a collections agency or small claims court if the balance remains unpaid. Including those options is not a threat, it is information the customer needs to make a decision.

Before escalating to a collections agency, consider whether a payment plan makes more sense. If the customer is genuinely having cash flow difficulties, a structured plan recovers more than an agency referral in most cases, and it preserves the relationship.

Here is a letter template you can adapt:

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Managing past due invoices manually gets harder as your business grows. The process above works, but it only works consistently if someone is actively tracking every account, every reminder, and every follow-up across your entire customer base. At a certain volume, that stops being realistic.

That is where Upflow comes in. With real-time AR dashboards, automated collection workflows, and direct integrations with your billing software, Upflow handles the tracking and follow-up so your team can focus on the accounts that actually need human attention.

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