What should my routine be for chasing overdue customer invoices, and what record should I keep of the follow-up?

What starts the chase, what follows it, and who does each step

The trigger for entering the collection routine is an invoice becoming overdue for payment, at which point the invoice is assigned to a collections clerk who carries out the collection activities; the article labels this step optional. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies with collections clerks, conditions: step is headed '(optional)'; applies when an invoice becomes overdue for payment)

“When an invoice becomes overdue for payment, assign it to a collections clerk for collection activities.”

The collection process should typically begin within a few days after a payment is missed, so that issues are addressed promptly. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function, conditions: hedged as 'typically' and 'within a few days'; no fixed number of days is stated)

“The collection process should typically start within a few days after a payment is missed to address issues promptly.”

Dunning letters are printed from the accounting software at fixed intervals, each letter pointing out the customer's overdue invoices. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function with accounting software, conditions: the article names no specific accounting software)

“Use the accounting software to print dunning letters at fixed intervals, with each one pointing out overdue invoices to customers.”

Partly established. Established: what condition triggers the first contact (S01, S02); the sequence of the contacts that follow (S03, S06, S18, S19); the escalation of the contacts that follow (S06, S18, S19). Missing: who is responsible for performing each step.

What every chasing message has to say and how it goes out

See Dunning letters are printed from the accounting software at fixed intervals, each letter pointing out the customer's overdue invoices.

Dunning letters are reviewed before issue and any relating to invoices where other collection activities are already in progress are pulled out; the remaining letters are sent to customers by mail or email. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function)

“Review the letters and extract any for which other collection activities are already in progress. Mail or email the other dunning letters to customers.”

The article recommends issuing dunning letters or e-mails when it appears a customer needs a mildly-worded reminder, and states that some companies use a series of such communications with progressively more strident wording. (jurisdiction: United States (US commercial publisher; no narrower jurisdiction stated), entity_scope: Companies contacting customers about overdue invoices, conditions: Trigger stated only as "when it appears that customers need a mildly-worded reminder" — no day-count threshold given; The escalating series is attributed to "some companies", not presented as a general rule)

“Issue dunning letters or e-mails when it appears that customers need a mildly-worded reminder. Some companies use a series of these communications, each one with progressively more strident wording.”

Not established from an authoritative source.

Required authority: high quality professional secondary reference. Highest achieved: high quality professional secondary reference.

Which invoices go into the routine — and which should not

See The trigger for entering the collection routine is an invoice becoming overdue for payment, at which point the invoice is assigned to a collections clerk who carries out the collection activities; the article labels this step optional.

See Dunning letters are printed from the accounting software at fixed intervals, each letter pointing out the customer's overdue invoices.

The article recommends dividing overdue accounts receivable into groups so that the highest-dollar invoices receive the most continual attention, which focuses effort on the few invoices making up the bulk of overdue receivables. (jurisdiction: United States (US commercial publisher; no narrower jurisdiction stated), entity_scope: Companies with a population of overdue receivables, conditions: No grouping thresholds or number of groups is stated)

“Divide the overdue accounts receivable into groups, with the highest-dollar invoices receiving the most continual attention. Doing so focuses attention on collecting those few invoices that comprise the bulk of the overdue receivables.”

The article recommends posting cash immediately — posting cash receipts to the accounting system every day and promptly investigating cash whose related invoice is unclear — so that collections staff do not call customers about invoices already paid. (jurisdiction: United States (US commercial publisher; no narrower jurisdiction stated), entity_scope: Companies with collections staff and an accounting system, conditions: Presented as one of the activities the article invites the reader to "consider")

“Conduct an immediate posting of cash, so the collections staff is not calling customers about invoices they have already paid. This means posting cash receipts every day to the accounting system, as well as promptly investigating any cash for which the related invoice is not clear.”

What to write down after every contact and every reply

After each collection call the details of the call are recorded, including (but not limited to) the date, the person contacted, the reasons given for late payment and any promises to pay. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function, conditions: list is introduced by 'including' and is therefore open, not exhaustive; stated for telephone calls; the article does not say where the record is held)

“Following each call, record the details of the call, including the date, person contacted, reasons given for late payment, and promises to pay.”

Maintaining the historical record of collection activities is critical because that record will be needed later to decide the next collection step. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function)

“It is critical to maintain this historical record of collection activities, since it will be needed in the future to decide upon the next collection step.”

Maintaining accurate records about the customer payment status is listed among the collections clerk's principal accountabilities; the records are described as being about customer payment status, with no fields, invoice-level attachment or storage location stated. (jurisdiction: United States, entity_scope: the collections clerk position, conditions: record content, per-invoice attachment, retrievability by others and retention are not addressed by the document)

“Maintain accurate records about the customer payment status”

Partly established. Established: who was contacted (S10); what was said (S10). Missing: the channel; what was sent; any promise to pay with its amount and date; any dispute raised.

Where the follow-up trail has to live so someone else can find it

See Maintaining accurate records about the customer payment status is listed among the collections clerk's principal accountabilities; the records are described as being about customer payment status, with no fields, invoice-level attachment or storage location stated.

The article recommends installing a computerised collections system whose functions include tracking customer promises, auto-dialling customers and automatically e-mailing invoices, among others. (jurisdiction: United States (US commercial publisher; no narrower jurisdiction stated), entity_scope: Companies with a collections function, conditions: Function list is open ("and so forth"); no named product or record format is specified)

“Install a computerized collections system that tracks customer promises, auto dials customers, automatically e-mails invoices, and so forth.”

A reminder is sent to the customer on demand from an opened invoice by clicking 'Reminders' and choosing 'Send Now' from the dropdown, i.e. the manual reminder action is taken on the individual invoice record. (jurisdiction: United States (Zoho Books US-EN help edition), entity_scope: an individual invoice selected under Sales > Invoices, platform: Zoho Books, platform_edition: US help centre edition, retrieved 2026-09-08, conditions: reminders configured first, per the preceding steps)

“Click Reminders and select Send Now from the dropdown to send a reminder to your customer.”

When using the Expected Payment Date action on an invoice, the user records the date on which the customer will be making payment. (jurisdiction: United States (Zoho Books US-EN help edition), entity_scope: an individual overdue invoice selected under Sales > Invoices, platform: Zoho Books, platform_edition: US help centre edition, retrieved 2026-09-08)

“Select the date your customer will be making payments to you.”

Not established from an authoritative source.

Required authority: high quality professional secondary reference, official platform documentation. Highest achieved: official platform documentation.

When the customer disputes the invoice or promises to pay

See Dunning letters are reviewed before issue and any relating to invoices where other collection activities are already in progress are pulled out; the remaining letters are sent to customers by mail or email.

See After each collection call the details of the call are recorded, including (but not limited to) the date, the person contacted, the reasons given for late payment and any promises to pay.

Where special payment plans exist, scheduled payment dates are compared with the dates payments are actually received, and customers are contacted as soon as it appears they will miss a scheduled payment date. The article labels this step optional. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies that have agreed special payment plans with customers, conditions: step is headed '(optional)'; applies only if special payment plans exist)

“If there are special payment plans, compare scheduled payment dates to the dates on which payments are actually received, and contact customers as soon as it appears that they will miss a scheduled payment date.”

The article states that salespeople's involvement can help resolve issues quickly by clarifying terms, pricing or delivery problems that delay payment. (jurisdiction: United States (US commercial publisher; no narrower jurisdiction stated), entity_scope: Companies with a salesforce and disputed or delayed customer payments, conditions: Hedged as "can help"; the article states no documentation requirement for the resolution)

“Their involvement can help resolve issues quickly by clarifying terms, pricing, or delivery problems that delay payment.”

Partly established. Established: what must be recorded at the moment a promise to pay occurs (S10). Missing: how a dispute changes the path of the routine; how a promise to pay changes the path of the routine; what must be recorded at the moment a dispute occurs.

Where the routine ends: an arrangement, an escalation, or writing the balance off

Referral of invoices to a collection agency is the hand-off point that follows once all other in-house collection techniques have been attempted. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function, conditions: applies only once all other in-house collection techniques have been attempted)

“Once all other in-house collection techniques have been attempted, shift invoices to a collection agency.”

If all other alternatives have failed, the company meets with its legal staff to determine whether it has a sufficient case against the customer to win a court judgment. The article labels this step optional. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies with legal staff, conditions: step is headed '(optional)'; applies only if all other alternatives have failed)

“If all other alternatives have failed, meet with the company’s legal staff to determine whether the company has a sufficient case against a customer to win a judgment against it in court.”

Recommending bad debt write-offs is listed among the collections clerk's principal accountabilities; the clerk recommends the write-off rather than authorising it. (jurisdiction: United States, entity_scope: the collections clerk position, conditions: the document states no criteria for concluding a balance is uncollectible and no approver of the write-off; not an accounting recognition or measurement rule)

“Recommend bad debt write-offs”

A nonbusiness bad debt deduction requires a separate detailed statement attached to the return, and that statement must contain a description of the debt including the amount and due date, the debtor's name and any business or family relationship with the debtor, the efforts made to collect the debt, and why the debt was decided to be worthless. (jurisdiction: United States (federal income tax), entity_scope: taxpayers claiming a nonbusiness bad debt deduction, conditions: applies to nonbusiness bad debts as reported on the taxpayer's return)

“A deduction for a nonbusiness bad debt requires a separate detailed statement attached to your return. The statement must contain: a description of the debt, including the amount and the date it became due; the name of the debtor, and any business or family relationship between you and the debtor; the efforts you made to collect the debt; and why you decided the debt was worthless.”

Partly established. Established: the hand-off point at which the routine ends in escalation beyond the business (S18, S19); the hand-off point at which the routine ends in an assessment that the amount will not be collected (S30). Missing: the hand-off point at which the routine ends in an agreed payment arrangement; what the accumulated record must be able to demonstrate at each hand-off point.

How, when and how often you may chase depends on the law and on who the customer is

For the purposes of the FDCPA, 'debt' is defined as an obligation or alleged obligation of a consumer to pay money arising out of a transaction whose subject matter is primarily for personal, family, or household purposes, whether or not reduced to judgment — so the Act's definition turns on the purpose of the underlying transaction. (jurisdiction: United States (federal), entity_scope: definition used throughout the FDCPA subchapter, conditions: definition only, as used in this subchapter)

“The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”

The FDCPA's definition of 'debt collector' does not include an officer or employee of a creditor while collecting debts for that creditor in the creditor's name. (jurisdiction: United States (federal), entity_scope: officers and employees of a creditor collecting in the creditor's own name, conditions: one item in an open list of exclusions (A)-(F) from the definition; § 803(6) separately states that the term includes a creditor who, in collecting his own debts, uses a name other than his own)

“any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;”

The FDCPA does not annul, alter or affect State laws on debt collection practices, or exempt anyone subject to it from complying with them, except to the extent those laws are inconsistent with the subchapter and then only to the extent of the inconsistency; a State law affording a consumer greater protection than the subchapter is not inconsistent with it. (jurisdiction: United States (federal), governing the relationship with the laws of any State as defined in § 803(8), entity_scope: any person subject to the provisions of the subchapter, conditions: preemption only to the extent of an inconsistency; more protective State law is not treated as inconsistent)

“This subchapter does not annul, alter, or affect, or exempt any person subject to the provisions of this subchapter from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection provided by this subchapter.”

Causing a telephone to ring, or engaging any person in telephone conversation, repeatedly or continuously with intent to annoy, abuse or harass any person at the called number is listed as a violation of § 806. (jurisdiction: United States (federal), entity_scope: debt collectors as defined in § 803(6), conditions: requires intent to annoy, abuse or harass the person at the called number; one item in a non-exhaustive list of violations)

“Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”

Partly established. Established: that the law varies with the jurisdiction (S25). Missing: that how a business may contact a customer about an unpaid balance is governed by law; that when a business may contact a customer about an unpaid balance is governed by law; that how often a business may contact a customer about an unpaid balance is governed by law; that the law varies with the nature of the customer; that the routine must be built within constraints established from authority rather than assumed.

The recognised shape of a collection routine

See The trigger for entering the collection routine is an invoice becoming overdue for payment, at which point the invoice is assigned to a collections clerk who carries out the collection activities; the article labels this step optional.

See The collection process should typically begin within a few days after a payment is missed, so that issues are addressed promptly.

See Dunning letters are printed from the accounting software at fixed intervals, each letter pointing out the customer's overdue invoices.

Partly established. Established: the trigger conditions of a receivables follow-up routine for a small business (S01, S02, S06); the escalation sequence of the routine (S06, S18, S19). Missing: the ownership of each step; the content expected of each contact.

What a follow-up record must capture, and where it is kept

See After each collection call the details of the call are recorded, including (but not limited to) the date, the person contacted, the reasons given for late payment and any promises to pay.

See Maintaining the historical record of collection activities is critical because that record will be needed later to decide the next collection step.

See Maintaining accurate records about the customer payment status is listed among the collections clerk's principal accountabilities; the records are described as being about customer payment status, with no fields, invoice-level attachment or storage location stated.

Partly established. Established: what a follow-up record must capture for each contact (S10); what a follow-up record must capture for each customer response (S10). Missing: the record held against the customer and the specific invoice; the record retrievable by someone who did not make the contact; the record not dependent on the continued presence of the person who made the contact.

Documenting a dispute, a promise to pay and an agreed payment plan

See After each collection call the details of the call are recorded, including (but not limited to) the date, the person contacted, the reasons given for late payment and any promises to pay.

A customer may submit a form detailing a deduction claim under the company's marketing plan; where that happens, the claim is verified with the marketing manager and matched against the deductions the customer has taken. The article labels this step optional. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies that operate a marketing plan under which customers may claim deductions, conditions: step is headed '(optional)'; applies only if the customer submits a deduction claim form)

“A customer may submit a form detailing a deduction claim under the company’s marketing plan. If so, verify the claim with the marketing manager and match it against deductions taken by the customer.”

Where it is necessary to accept a longer payment period, the terms of the payments to be made are documented, together with any interest to be paid and any personal guarantees of payment. The article labels this step optional. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function, conditions: step is headed '(optional)'; applies only where accepting a longer payment period is necessary)

“If it is necessary to accept a longer payment period, document the terms of the payments to be made, as well as any interest to be paid and any personal guarantees of payment.”

Partly established. Established: how a customer promise to pay is documented (S10); how an agreed payment arrangement is documented (S28). Missing: how a disputed balance is documented; how each changes the follow-up path.

What the accumulated record has to show at the decision point

See Maintaining the historical record of collection activities is critical because that record will be needed later to decide the next collection step.

See Where it is necessary to accept a longer payment period, the terms of the payments to be made are documented, together with any interest to be paid and any personal guarantees of payment. The article labels this step optional.

Aging trends, missed promises to pay, unresolved disputes, customer insolvency and failed collection attempts are items that may indicate higher expected losses. (jurisdiction: Not stated in the document; US-published general business guidance (AccountingTools, Inc., a US accounting/CPE publisher), entity_scope: Companies running a collections function that maintain an allowance for doubtful accounts, conditions: hedged as 'may indicate'; the article does not state that the list is exhaustive)

“Aging trends, missed promises, unresolved disputes, customer insolvency, and failed collection attempts may indicate higher expected losses.”

A debt becomes worthless when the surrounding facts and circumstances indicate there is no reasonable expectation that it will be repaid. (jurisdiction: United States (federal income tax), entity_scope: taxpayers determining whether a debt is worthless for federal income tax purposes, conditions: test is based on surrounding facts and circumstances)

“A debt becomes worthless when the surrounding facts and circumstances indicate there's no reasonable expectation that the debt will be repaid.”

To show a debt is worthless, the taxpayer must establish that reasonable steps were taken to collect it. (jurisdiction: United States (federal income tax), entity_scope: taxpayers seeking to show a debt is worthless, conditions: the page does not specify which steps count as reasonable)

“To show that a debt is worthless, you must establish that you've taken reasonable steps to collect the debt.”

Partly established. Established: what the accumulated follow-up record is expected to demonstrate at the point a business concludes that the balance will not be collected (S29, S31). Missing: what the accumulated follow-up record is expected to demonstrate at the point a business agrees a payment arrangement with the customer; what the accumulated follow-up record is expected to demonstrate at the point a business escalates a balance.

What the accounting system itself does about overdue-invoice reminders

See A reminder is sent to the customer on demand from an opened invoice by clicking 'Reminders' and choosing 'Send Now' from the dropdown, i.e. the manual reminder action is taken on the individual invoice record.

Zoho Books can send reminder emails to customers or to users prompting payment of invoices or bills, and the sending can be done manually or automated. (jurisdiction: United States (Zoho Books US-EN help edition), entity_scope: Zoho Books organizations with customers or users, platform: Zoho Books, platform_edition: US help centre edition, retrieved 2026-09-08)

“Zoho Books lets you send emails to your customers or users to remind them to make payments for their invoices or bills. You can send invoices manually or automate the process and start collecting payments quicker.”

One manual reminder case in Zoho Books is 'Reminders for Overdue Invoices', which emails customers to prompt payment of overdue invoices where they have missed the due date. (jurisdiction: United States (Zoho Books US-EN help edition), entity_scope: customers with invoices past their due date, platform: Zoho Books, platform_edition: US help centre edition, retrieved 2026-09-08, conditions: invoice due date missed)

“Reminders for Overdue Invoices : Send emails to remind customers to make payments for overdue invoices in case they’ve missed the due date.”

Three due-date-based automated reminders exist by default, and each can be set to send either before or after the invoice due date. (jurisdiction: United States (Zoho Books US-EN help edition), entity_scope: due-date-based automated invoice reminders, platform: Zoho Books, platform_edition: US help centre edition, retrieved 2026-09-08, conditions: 'three' is the default configuration as stated, not a stated maximum)

“By default, there are three reminders. You can choose to send reminders before or after their due date.”

Partly established. Established: how mainstream small-business accounting systems support overdue-invoice follow-up through reminders (S03). Missing: how mainstream small-business accounting systems support overdue-invoice follow-up through statements; how mainstream small-business accounting systems support overdue-invoice follow-up through notes or communication history recorded against a customer or an invoice; what of that history is retrievable later.

The rules themselves: contact hours, stopping contact, disputes, and state law on top

One of the circumstances barred by § 805(a) is communicating at any unusual time or place, or a time or place known or which should be known to be inconvenient to the consumer; in the absence of knowledge of circumstances to the contrary, the debt collector must assume the convenient time for communicating is after 8 a.m. and before 9 p.m., local time at the consumer's location. (jurisdiction: United States (federal); convenient hours are measured by local time at the consumer's location, entity_scope: debt collectors as defined in § 803(6) communicating with a consumer, conditions: the 8 a.m. to 9 p.m. assumption applies only in the absence of knowledge of circumstances to the contrary; subject to the § 805(a) opening exceptions for prior consumer consent or court permission)

“at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antemeridian and before 9 o'clock postmeridian, local time at the consumer's location;”

If a consumer notifies a debt collector in writing that the consumer refuses to pay the debt or wishes communication to cease, the debt collector must not communicate further with the consumer about that debt, apart from the exceptions listed in § 805(c)(1)-(3). (jurisdiction: United States (federal), entity_scope: debt collectors as defined in § 803(6), conditions: the consumer's notification must be in writing; listed exceptions in § 805(c)(1)-(3) permit certain further notifications)

“If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --”

If the consumer notifies the debt collector in writing within the thirty-day period that the debt or any portion of it is disputed, or requests the name and address of the original creditor, the debt collector must cease collection of the debt (or the disputed portion) until it obtains verification of the debt, a copy of a judgment, or the original creditor's name and address, and mails a copy of that verification, judgment, or name and address to the consumer. (jurisdiction: United States (federal), entity_scope: debt collectors as defined in § 803(6), conditions: consumer's notification must be in writing and within the thirty-day period described in § 809(a))

“If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.”

A debt collector may not engage in conduct whose natural consequence is to harass, oppress or abuse any person in connection with collecting a debt; the paragraphs that follow list conduct that violates the section without limiting the general prohibition. (jurisdiction: United States (federal), entity_scope: debt collectors as defined in § 803(6); protects any person, not only the consumer, conditions: the enumerated list is expressly non-exhaustive ("without limiting the general application of the foregoing"))

“A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:”

Not established from an authoritative source.