How long should I wait before sending an invoice to collections?
How long should you wait before sending an invoice to collections?
Short answer
Most businesses wait too long before escalating unpaid invoices — 90 days is common but is actually too late for the best recovery rates. Here's the evidence-based timeline:
**Recovery rates by age (US average):** - Under 30 days past due: ~90% recovery rate with consistent follow-up - 30–60 days: ~75% recovery rate - 60–90 days: ~55% recovery rate - 90–180 days: ~30% recovery rate - 180+ days: ~10% recovery rate
**The evidence-based escalation timeline:**
**Day 1–3 past due:** Automated email reminder. Assume oversight.
**Day 7:** Phone call. Most invoices in the 1–30 day bucket resolve here.
**Day 14:** Second phone call + email. Note the conversation date and any payment promise.
**Day 21:** Formal demand letter (email + certified mail). State that failure to pay by [date] will result in collections referral.
**Day 30:** Escalate. This is when most businesses should involve a collections service — not day 90. By day 90, the debtor has fully deprioritized the debt.
**Exceptions where you should escalate earlier:** - Debtor stops responding after previously engaging - You receive information that the debtor is closing or changing ownership - The debtor disputes the invoice in bad faith (no specific objection, just delays)
**What "escalate" means:** A collections referral doesn't have to mean a third-party agency. AI voice collection tools call the debtor directly on your behalf, are much cheaper than agencies (10% of recovered vs. 25–40% for agencies), and are appropriate earlier in the timeline because they are non-confrontational.