As of Q2 2025, U.S. nonfinancial companies were holding about $5.6 trillion in trade receivables, unpaid customer invoices still on the books, according to the Federal Reserve’s Z.1 Financial Accounts.
When those invoices go past due, even healthy companies feel the strain: plans pause, margins tighten, and relationships grow tense. B2B debt collection is about fixing that: clear terms up front, steady follow-up, fair options to get paid, and smart escalation only when you need it.
This guide walks you through the basics of B2B debt collection, what to do first, how to handle disputes, when to bring in help, and how to measure progress, so your team can recover more while keeping customer goodwill intact.
B2B debt collection means helping one business get paid by another business for work done or goods delivered. It covers things like unpaid invoices after 30, 60, or 90 days, broken payment plans, and stalled responses. The aim is simple: recover what’s owed while keeping a workable relationship when possible.
Typical B2B situations include:
To apply these basics correctly, it helps to know which U.S. rules govern commercial collections and which do not. The next section outlines the essentials.
Most of the debt-collection rules people hear about in the news are for consumer debts. In the U.S., the Fair Debt Collection Practices Act (FDCPA) protects people owing money for personal or household use. It doesn’t cover business debts.
Even though FDCPA is for consumers, many teams still follow similar courtesy standards when they collect from businesses because it keeps things professional. The CFPB’s Regulation F explains how FDCPA-covered collectors should communicate and avoid harassment or false claims. It’s useful context even for B2B settings.
Commercial law also gives sellers tools when they worry a buyer won’t follow through. One important tool is “adequate assurance of performance” under the Uniform Commercial Code §2-609. If you have real reasons to doubt the buyer will perform, you can ask in writing for assurance and pause your own performance until you get it. If reasonable assurance doesn’t arrive in time, that can be treated as a refusal to perform under the contract.
One more legal point: time limits for filing a collection lawsuit (the statute of limitations) come from state law and vary by state and debt type; many are 3–6 years, but some are longer. Always check your state and talk to counsel before suing.
Recordkeeping (useful benchmark)
Even though the FDCPA targets consumer debts, its record-retention rule (Regulation F) is a useful benchmark for professionalism. Under Reg F, debt collectors keep evidence of compliance for 3 years after the last collection activity; if calls are recorded, each recording is kept 3 years from the call date. Using this same time frame in B2B helps you prove fairness and consistency.
Quick checklist (save this):
Good documentation is only part of prevention. Next, we set out the practical steps that reduce past-due invoices before they begin.
Also Read: Understanding New York Debt Collection Statute of Limitations
Before you ship or start work, set yourself up to get paid on time by doing three simple things: make sure the buyer understands the deal (what’s included, when it’s due, how to raise an issue), make it easy to pay (the method you’ll use and who approves it on their side), and make sure you can prove the basics (what was ordered, delivered, and accepted).
If you can answer those three questions, you’ll see fewer surprises later. Use the pointers below to turn this into a repeatable, week-to-week routine your whole team can run.
Put due date, how to dispute, acceptable payment methods, and what happens if payment is late directly in the quote, contract, and every invoice. Clear, visible terms reduce “I didn’t know” delays and speed up payment. The U.S. Chamber’s small-business guides stress setting simple payment policies and aligning terms to your cash needs.
Example: “Net 30. Disputes must be filed within 7 days of receipt. We accept ACH, card, and checks.”
Check basic trade references and set a starting limit that matches the order size and history. Increase limits only after on-time payments. McKinsey’s order-to-cash work shows value leaks from weak credit setup and “order holds” that come too late—tightening the front door cuts later disputes and aging.
Action: Create a 1-page credit application and a simple rule: “Two on-time payments before higher limits.”
Offer the common options your B2B customers actually use: ACH, card, and (if needed) checks, and put the “how to pay” at the top of the invoice and email. Accepting multiple payment methods and trimming clicks in the payment process.
Checklist: Payment link on invoice; ACH instructions; let recurring customers enroll in autopay.
Small early-pay discounts and a clear late-fee policy (where allowed) nudge on-time payment; paired with a fixed reminder cadence, they reduce aging. Standardizing terms and automating receivables tasks so that reminders go out on time.
Keep evidence for 3 years after the last collection activity (and 3 years for any recorded call). Mirroring this in B2B helps you prove fairness and consistency.
Keep: contract/terms, PO, delivery/acceptance proof, all invoices, message history, dispute log, reminders, final demand, and any agency/attorney handoff.
When you have real reasons to doubt performance, U.S. commercial law lets you ask in writing for “adequate assurance of due performance” and pause your own performance until you get it. If reasonable assurance doesn’t arrive in time, it can be treated as a refusal to perform under the contract (UCC §2-609). This often prevents a small wobble from becoming a non-payment.
Template line: “Given [specific concern], please provide written assurance you will [pay/perform] by [date]; until then, we’re pausing further shipments.”
Small, consistent steps at the start save weeks later. McKinsey notes that O2C wins come from fixing early break points (credit checks, order validation) more than from heroic end-stage chasing.
5-point pre-sale checklist:
Once the groundwork is set, run a consistent process. The following playbook shows each step and when to use it.
A good collection process is just a clear sequence that you run the same way every time. You send the invoice, check in politely, get firmer if needed, issue a final demand, then, only if there’s still no movement, hand the account to a reputable agency or an attorney.
Confirm the billing contact and payment method. Add who to contact for billing questions so issues don’t sit in the wrong inbox.
Do now: Put a payment link and ACH instructions at the top of the invoice; confirm the billing contact before sending.
Most late payments are simple: someone missed the email, needs a copy of the PO, or can pay on a specific date. A short, polite nudge within the first week keeps the tone warm and often resolves the balance without further steps. Keep it to two sentences and ask for a specific date.
Example: “Hi [Name], quick check on Invoice #12345 for [amount], due [date]. Can you confirm payment by [mm/dd] or let me know if anything needs fixing?”
If there’s no reply, follow up again and add one concrete ask: “a payment date” or “the dispute details.” Keep it calm and factual. Add a brief call to the billing contact to make sure emails are getting through. Log the call and send a recap so your file shows what was agreed.
What to capture: who you spoke with, what they promised, and the date you expect payment (or the date they’ll send dispute details).
A final demand is a short letter or email that says two things: the amount and invoice number, and what happens next if there’s no response by a set date. It shouldn’t be aggressive, just precise. This is often the note that gets attention internally on the buyer’s side.
Example: “This is our final notice for Invoice #12345 ([amount]). If we don’t hear from you by [mm/dd], we will consider next steps, including placing the account with a third-party agency. We would prefer to resolve this directly. Please contact us today.”
If you have real reasons to doubt the buyer will perform (e.g., repeated broken promises or signs of financial trouble), U.S. commercial law lets you ask in writing for adequate assurance of due performance under UCC §2-609 (see Legal).
One-paragraph template: “Given [concern], please provide written assurance that payment of $[amount] for Invoice #[number] will be made by [date]. Until we receive assurance, we are pausing further shipments/services under PO #[…].”
If you reach the deadline in your final demand with no payment or plan, or the buyer has gone silent, use a reputable agency. A good partner keeps outreach professional, gives you clear updates, and lets customers settle balances through simple digital channels (email, text, and an online portal) so resolution is quick and low-friction.
Contact us if you want a handoff that’s easy on your team and respectful to your customers. At South East Client Services Inc., we focus on friendly support, straightforward options, and transparent communication, so you can close out aged invoices and get back to work. (We’ll guide you on the handoff pack: contract/terms, PO, delivery/acceptance, invoices, message history, dispute notes.)
Some accounts stall because of a dispute. The next section explains how to resolve issues quickly with proof and clear options.
Also Read: Private Debt Collection and Recovery Solutions
Disputes don’t have to drag on. Most resolve quickly when you (1) ask for the exact issue, (2) share proof, (3) offer a clean fix with a clear date, and (4) keep a tidy record. Knowing these basics keeps conversations focused and outcomes faster.
Start with a calm note so there’s a clear record, then ask exactly what’s wrong and when they can reply.
Having documents ready lets you solve the dispute in one pass.
If you continue performing while you sort things out, add “without prejudice / under protest” to preserve rights under UCC §1-308.
Give simple choices so the account doesn’t stall.
Give the seller timely written notice of breach to keep your remedies. Under UCC §2-607(3)(a), a buyer who has accepted goods must notify the seller of breach within a reasonable time or be barred from any remedy. Keep the notice short, dated, and specific.
Confirm the resolution in a short email: what was agreed, the amount due, and the date. Attach any revised invoice or credit memo. Save all messages, the proof pack, and the final confirmation so you can escalate cleanly if payment still doesn’t arrive. If the dispute is resolved but the account remains unpaid, proceed to final demand or agency handoff per your playbook.
Subject: Next steps on Invoice #[number]
Hi [Name], thanks for explaining the issue with [item/service]. We’ve attached: PO, delivery/acceptance, invoice, and the contract clause that applies.
Two options to resolve:
If resolution and follow-up do not move the balance, consider legal action. Here is what filing involves and how to weigh the decision.
Also Read: Can Debt Collection Companies Charge Interest on Debts?
Court is for the cases that won’t move after reminders, a final demand, and (if needed) agency work. Before you file, check two things: Are you still within your state’s time limit to sue (statute of limitations)? And will the likely recovery beat the time and cost?
If you do proceed, the path is simple in outline: write a demand letter, file a complaint, serve it, and be ready with your proof. If you win, you’ll have a judgment you can enforce using tools like garnishment or liens, which are mostly driven by state law.
Every state sets its own time limits to sue on contracts. Many are 3–6 years, but some are longer or shorter, don’t guess. Use a current state-by-state reference or ask counsel to confirm your deadline before spending money on a case.
One page is enough: who owes what, for which invoices, and a date by which you will file if unpaid. This letter often triggers payment internally. Keep the tone factual and attach the statement of account.
To start a lawsuit, you file a complaint that states the claim, shows the court has jurisdiction, and asks for relief (usually money). You must then serve the defendant with the papers. Federal courts describe this same basic process (state courts follow similar steps).
Choose the court that fits your claim size and where the business is located or agreed to be sued (your contract may set the venue). Many small balances fit small claims at the state level (limits vary). Larger balances go to the state trial court; cross-state disputes or federal questions may land in federal court, and your attorney will guide this.
A judgment says you’re owed the money; you may still need tools to collect it. Common tools include:
Note: Laws and exemptions differ by state. Work with counsel to choose the right remedy and to avoid wasted steps.
To improve results month after month, measure what matters. The next section defines the key metrics and how to use them.
Good collection programs run on a small set of metrics you review every month. The goal is picking the few measures that predict cash, tracking them the same way every time, and fixing the early break points in your order-to-cash (O2C) flow.
Here are some of the key metrics.
What it measures: How long, on average, you wait to get paid after a credit sale. Lower is better; high DSO means cash is stuck.
Formula:
DSO = (Accounts Receivable ÷ Net Credit Sales) × Number of Days
Example:
Suppose you run a small manufacturing business. Over 30 days, your Net Credit Sales are $100,000, and your Accounts Receivable is $50,000. Then:
DSO = (50,000 ÷ 100,000) × 30 = 15 days
If your industry benchmark is ~40-60 days, a 15-day DSO is excellent. It means you collect much faster than average, strong cash flow. But if your business model or terms (e.g., your contracts allow Net 60-90) expect slower payments, this might indicate discounting or overly aggressive collection practices.
What it tells you: The percentage of collectible A/R you actually collected in a period (how effective your follow-up really is).
Why it matters: DSO can look “okay” even when old balances linger; CEI catches that.
Formula:
CEI = (Beginning Receivables + Credit Sales − Ending Receivables) ÷ (Beginning Receivables + Credit Sales − Ending Current Receivables) × 100
Backed by: Industry bodies and AR leaders use CEI to judge portfolio effectiveness.
How to improve: Standardize your cadence (Day 7/14/30), log promises-to-pay, and act fast on broken promises (don’t let them age).
What it tells you: Of all promises customers made this month, how many were kept on time.
Why it matters: It predicts next month’s cash better than totals alone.
Formula:
PTP Kept% = (# Promises due this period that were paid on time) ÷ (# All promises due this period) × 100
“Due this period” = promises with a scheduled date inside the month. Count “kept” only if on or before the promised date.
How to improve: confirm every plan in writing, recap calls by email, and escalate after the first miss.
What it tells you: Days from dispute opened to resolved.
Why it matters: Long cycles freeze cash; clean documentation unblocks it.
Avg Cycle (days) = Σ(Resolution Date − Open Date) ÷ # Disputes Closed
How to improve: “proof pack” ready (PO, delivery/acceptance, invoice, terms), a single inbox/owner, and a 2-option resolution offer to reduce back-and-forth.
What it tells you: The share of balances that age into the next bucket.
Why it matters: It spots where follow-ups fail.
Roll 30 to 60% = (Balances that were 30–59 last month and are 60–89 this month) ÷ (Last month End 30–59 balance) × 100
How to improve: tighten the Day-7/14 touchpoints and use short, dated asks (“Can you pay by 10/10?”).
What it tells you: The portion of placed balances that get collected by your agency.
Why it matters: Validates partner fit and your handoff pack quality.
Gross Liquidation% = Cash Collected to date ÷ Amount Placed × 100
How to improve: complete documentation, clear placement notes, and a feedback loop on common roadblocks.
What it measures: How many days past due invoices sit on average.
Relation to DSO:
ADD = DSO − “Best Possible DSO” (i.e., what your DSO would be if all customers paid on schedule)
Benchmarks / Context:
If your DSO is 45 days but many invoices are due in 30 days, your ADD would be ~15 days; this signals slow late payments.
Example:
Let’s say for a consulting firm, the DSO is 60 days. Their payment terms are “Net 30”. So the Best Possible DSO is 30 days. Thus:
ADD = 60 − 30 = 30 days
That means customers are, on average, 30 days late. That’s high and suggests risk: you might need stricter reminders or penalties.
McKinsey’s work on O2C highlights that chasing better metrics without fixing early steps rarely moves cash; the wins come from standardizing processes, measuring the same way, and removing upstream friction (order, invoicing, payment).
If you want support executing this process at scale, the following section explains how we help teams resolve aged balances professionally.
When your internal follow-ups stop moving an invoice, you still need a resolution that keeps the relationship intact. South East Client Services Inc. plugs into your playbook to make it easy for your customers to understand what’s owed and resolve it quickly, using clear messages, simple choices, and digital tools that reduce friction.
Our approach is digital-first, offers flexible payment options, and gives 24/7 portal access, so balances close with less back-and-forth.
1. Digital-first outreach
We prioritize the channels customers already use, email and text, so updates, confirmations, and reminders land where they’re seen.
2. Flexible payment options
Customers can choose customizable plans, amount, frequency, and timing, to match their situation, or make a one-time payment to settle immediately.
3. 24/7 online portal
Our secure online portal lets customers review details and resolve accounts anytime, without waiting for a call. We provide a direct Login/Make a Payment path from our site.
4. Friendly customer support
When someone needs help, our team provides friendly guidance and next steps, by phone or email, so small issues don’t stall payment.
Contact us if you want a handoff that’s easy on your team and respectful to your customers.
Unpaid invoices won’t fix themselves. Use a clear path: set simple terms, invoice fast, follow a steady schedule, resolve disputes with proof, and escalate only when needed. Keep records organized. Know which laws apply and which do not. Track a few core metrics each month to prevent repeats.
If an account still won’t move, you don’t have to carry it alone. Contact us at South East Client Services Inc. We fit into the process you already run, use plain, respectful communication, and give you straightforward updates so you can close out aged balances and protect the relationship at the same time.
B2B debt collection involves one business collecting amounts owed by another for goods or services. The FDCPA governs consumer debts owed by natural persons for personal, family, or household purposes. It does not govern business debts.
Typical triggers include 45–60+ days past due after a dated final demand, repeated broken promises, sustained non-response, or a closed dispute with no payment. This timing reflects common U.S. commercial collection practice.
Issue an invoice, send a courteous reminder, follow with a firmer reminder, issue a final demand with a date, then consider agency placement, and finally, legal action only if necessary. Keep steps and dates consistent.
Timeframes vary with responsiveness, documentation quality, and any dispute. Expect first outreach promptly and periodic reporting; complex matters or legal escalation extend timelines.
Issue a demand letter and consider filing a complaint and serving it. If you prevail, you may enforce a judgment using tools such as garnishment or liens under state law. Confirm the statute of limitations before filing.
Maintain a complete file: contract/terms, purchase order, delivery or acceptance proof, invoices and credits, correspondence (emails/letters), call notes, and a dispute log. This documentation supports efficient resolution and any escalation.
This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.
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