Customer not paying? What businesses can do next

Why quick action decides on your money

Fast action decides because the value of an outstanding claim decreases with each month. Credit insurance Coface estimates that around 80 percent of the bills that are overdue between six months and two years will never be paid again (2025). Anyone who waits and hopes will give away all the money in doubt.

For the next step in a specific case, see customer not paying. If several invoices remain outstanding, establish a consistent receivables management process.

The reason is simple. The older a claim becomes, the more other creditors report, the worse the debtor's financial situation often becomes, and the more difficult it is to understand what was originally agreed. Time always works against you in outstanding claims.

In addition, the effect on your own liquidity. Money that is missing in your account cannot be reinvested, used for cheap purchases and not put into growth. A single larger unpaid invoice can consume the profit from many cleanly handled orders. And the delay is far from an isolated case: According to Coface, around 81 percent of companies reported payment delays in 2025, the fourth year in a row with an increasing tendency.

Every day a claim remains open reduces your chance of payment. Action is almost always cheaper than waiting. The late-payment interest calculator works out in a minute how much late-payment interest an invoice has accrued in the meantime.

Understanding late payment: the first two questions

Before escalating, clarify two questions. Is the invoice correct, complete and demonstrably received by the right person? Is the customer simply unwilling to pay, or is there a substantive objection? The answers determine the appropriate next step.

A missing order number, a wrong address or an unclear service description are frequent and avoidable reasons for missing payments. Therefore, check the formal points first before you tighten the tone.

A substantive objection, such as an unresolved complaint, differs from simple non-payment. Clarify the facts in the first case and follow the reminder process in the second. Record your assessment, even as a brief invoice note: documented steps matter if the case escalates.

Speak to the customer before escalating

The first active step is usually the easiest: a factual call. Many invoices are not paid too late for bad intent, but because they have gone down in accounting, the responsible person was on vacation or the invoice has never arrived.

Stay calm and solution-oriented in the conversation. At the end, keep a concrete, binding payment date and confirm it in writing by e-mail. This is how you maintain the customer relationship and at the same time have a documented status.

A simple conversation guide for the first call:

• Friendly opening. Name invoice number and amount and ask openly if the invoice has arrived and everything is fine.
• Listen. Determine whether there is a formal error, an objection or a liquidity bottleneck behind it. The reason determines the next step.
• Agree on a firm next step. Arrange a specific payment date or, if cash is tight, instalments with clear dates.
• Confirm in writing. Summarize the result in two sentences by e-mail. This is your proof.

Only when this binding date passes without payment, do you pass into the formal reminder.

Using informal and formal payment reminders correctly

The payment reminder is the friendly note, the reminder the serious, formal invitation with clear deadline. From the beginning of the delay you are entitled to late-payment interest and, between companies, to a statutory lump sum that the defaulting customer carries, not you.

Anyone who communicates this clearly from the beginning signals professionalism and increases the willingness to pay. An effective reminder clearly designates the invoice, sets a specific deadline and points to the consequences of the further delay. The Payment reminder generator creates a formally correct template with deadline and interest notice in a few minutes.

How many reminders make sense and what matters in the wording is explained in the article Write reminders correctly. If the customer has understandable cash-flow problems, offer payment in instalments, but always in writing and with clear dates. A documented partial payment brings you closer to your money and keeps the process moving.

When a professional receivables management is useful

If the customer does not respond to a clear reminder, handing over to a professional receivables management is the logical next step, and he should come earlier than many think. Whether handover is appropriate depends on the claim, evidence, objections and previous correspondence. There is no universal number of unsuccessful reminders that determines this.

A specialized partner takes care of communication, time-limit management and consistent enforcement. This relieves your team, which is otherwise valuable time in the writing. An objective third party also creates distance: The personal relationship between you and your customer is not further burdened, while the claim is still consistently pursued.

Modern suppliers work digitally and transparently. At incaseof.law you hand over a claim in a few minutes, see the state of your case at any time and know the Costs from the start. Recovery and timing are not guaranteed. The terms govern scope, costs and allocation of payments received. The related topic pages summarise how structured receivables management works and what you can do if a customer does not pay.

Judicial enforcement as a final step

If the claim remains undisputed and the customer still does not pay, the way leads through the court order for payment to an enforceable title. Only this title allows for compulsory enforcement, for example through salary or bank balances.

The order is important: out-of-court clarification and payment reminder first, then professional receivables management, and judicial enforcement as a consistent conclusion. A good partner controls this entire path for you, until enforcement, without having to initiate each step yourself.

The exact procedure, deadlines and costs of the court route are explained in the article Payment-order claims in Austria: process, deadlines and costs. In most cases, however, this step is not needed at all: most claims are settled before a court is even involved.

Which step suits which claim?

Which step fits depends above all on the age of the claim and the reaction of the customer. The following overview gives a quick direction. It does not replace a case-by-case examination, but clearly classifies the typical situation.

Orientation values, no legal advice in individual cases. Chance of realisation from six months: Coface payment experiences Germany 2025.

Two patterns are crucial: the older the claim, the faster you should escalate. And the clearer the claim is documented, the smoother each further step runs. The How debt collection works page shows how the handover works in practice.

The true price of an unpaid invoice

An outstanding claim costs more than the mere invoice amount. The hidden costs are often underestimated and they quickly add up to a multiple of the original amount.

• Time. Every phone call, every payment reminder, every formal reminder costs working hours that are missing from day-to-day business.
• Interest loss and opportunity costs. Missing money can't be reinvested and not used for cheap purchases.
• Risk of default. The longer the invoice is open, the higher the probability of a total loss.
• Psychological stress. Outstanding claims are a burden, especially if the customer relationship is actually good.

A figure from the Atradius Payment Practices Barometer shows how large the share is that is ultimately lost altogether: on average, companies had to write off around 8 percent of their receivables as uncollectable. This is precisely why a systematic process is so valuable. It takes the decision out of gut feeling and turns outstanding invoices back into predictable liquidity.

To prevent future defaults

Payment defaults can be avoided most effectively before they arise. Three levers are particularly strong, and all three grab before the first bill is even written.

• Check credit quality. Check the solvency of new customers before the contract is signed, especially with larger order volumes.
• Fix conditions in writing. Arrange clear payment deadlines in writing and work with advance payments for large orders.
• Send reminders early and automatically. A consistent dunning process that kicks in automatically and does not depend on the mood of the day keeps your claims young.

If you combine these three levers, you will noticeably reduce the number of failures and will have to escalate less often. And if a customer does not pay an invoice after all, the process in this guide applies: a conversation, a reminder, professional receivables management and, if necessary, court proceedings. You can submit a claim online at any time, under the terms and with no minimum volume.

This guide provides a general overview and does not replace advice on an individual case. The cited sources were last checked in July 2026.