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Collections Process Guide

Framework Level 4

Configuration

Select your jurisdiction and add clients to begin tracking through the collections process.

No clients added yet. Click "Add Client" above to start tracking collections.

Collection Stages Reference

Click any stage below to expand the full guidance, templates, and checklists.

Day 1 Stage 1: Friendly Reminder

Recommended Action

Send a polite payment reminder email. Assume the client simply forgot or the invoice was lost.

Email Template

Email
Hi [Client], I hope you are well. I wanted to follow up on Invoice #[X] for [amount], which was due on [date]. Could you kindly confirm receipt and let me know when we can expect payment? Happy to resend the invoice if needed. Best regards, [Your Name]

Phone Script

Phone
Hi [Client], just a quick call about Invoice #[X]. I wanted to make sure you received it and check if there are any questions about the amount. When would be a good time to process this?

What to Document

Record: Date of contact, method used, response received

Checklist

Day 7 Stage 2: Firm Follow-Up

Recommended Action

Send a firmer reminder. Reference your payment terms. Attach the original invoice again.

Email Template

Email
Dear [Client], I am writing regarding Invoice #[X] for [amount], which is now [days] days past the due date of [date]. Per our agreed payment terms, payment was due within [Net X] days. I have attached the original invoice for your reference. Please arrange payment at your earliest convenience or contact me to discuss any concerns. Kind regards, [Your Name]

Phone Script

Phone
Hi [Client], I am following up on our outstanding Invoice #[X]. It is now [days] days overdue. I understand things come up, but I do need to get this resolved. Can we set a specific date for when you will process the payment?

What to Document

Record: Communication log, any reason given for delay, promised payment date

Checklist

Day 14 Stage 3: Escalation Notice

Recommended Action

Formal escalation notice. Reference late payment penalties. Consider pausing any ongoing work.

Email Template

Email
Dear [Client], This is a formal notice regarding Invoice #[X] for [amount], now [days] days overdue. As per our agreement, a late payment fee of [X]% per month applies to overdue balances. The current outstanding amount including late fees is [calculated amount]. Please note that continued non-payment may result in the suspension of ongoing services. I would prefer to resolve this amicably. Please contact me within 48 hours to arrange payment. Regards, [Your Name]

Phone Script

Phone
Hi [Client], I need to have a serious conversation about Invoice #[X]. It has been [days] days since the due date, and I have not received payment or a clear timeline. I want to find a solution, but I also need to let you know that late fees are now accruing, and I may need to pause our current work until this is resolved.

What to Document

Record: Written record of escalation, any payment plan offered, work suspension decision

Checklist

Day 30 Stage 4: Final Demand

Recommended Action

Send a formal final demand letter. Give a specific deadline (7 to 14 days). Reference legal action as the next step.

Email Template

Final Demand Letter
SUBJECT: FINAL DEMAND - Invoice #[X] Dear [Client], This letter serves as a Final Demand for payment of Invoice #[X]. Original amount: [amount] Late fees accrued: [late fee amount] Total outstanding: [total amount] Original due date: [date] Days overdue: [days] Despite previous correspondence on [dates of prior contact], payment has not been received and no acceptable payment arrangement has been made. You are hereby given 14 calendar days from the date of this letter to remit the full outstanding balance of [total amount]. Failure to make payment by [deadline date] will result in this matter being referred to a collections agency or legal counsel for further action, which may include court proceedings and additional costs. I urge you to treat this matter with the seriousness it requires. Yours sincerely, [Your Name] [Your Business Name]

What to Document

Record: Delivery confirmation (email read receipt, recorded delivery), exact deadline given

Jurisdiction-Specific Legal References

United States: Small Claims Court is available in every state. Limits vary by state (typically $2,500 to $25,000). Filing fees are generally between $30 and $75. No attorney required. Check your state court website for specific procedures and limits.
United Kingdom: Money Claim Online (MCOL) allows claims up to GBP 100,000 through the gov.uk portal. The Late Payment of Commercial Debts (Interest) Act 1998 entitles you to statutory interest of 8% plus the Bank of England base rate on overdue B2B invoices, plus fixed compensation of GBP 40 to GBP 100 depending on the debt size.
Nigeria: Magistrate Courts handle debt recovery for smaller amounts (limits vary by state). For larger claims, the High Court has jurisdiction. Consider engaging a legal practitioner to send a formal demand letter, as this often prompts payment. The Sheriff and Civil Process Act governs enforcement of judgments.
Canada: Small Claims Court limits vary by province (e.g., Ontario: CAD 35,000; British Columbia: CAD 5,000; Alberta: CAD 50,000). Filing can often be done online. Provincial limitations periods typically range from 2 to 6 years. Check your province for specific procedures.

Checklist

Day 45+ Stage 5: Formal Collection

Recommended Action

Engage a formal collection process. Evaluate the options below based on the amount owed, your relationship with the client, and how much time you are willing to invest.

Collection Options

Collections Agency

Pros: Minimal effort on your part, agencies handle all communication, good for multiple small debts

Cons: Agency takes a percentage (typically 25% to 50%), less control over process, may damage client relationship permanently

Legal Letter from Solicitor / Attorney

Pros: High impact, often prompts immediate payment, shows seriousness, relatively low cost (one-off fee)

Cons: Cost of legal fees (typically $200 to $500 for a demand letter), may not work if client is unresponsive

Small Claims Court Filing

Pros: Court-enforceable judgment, no attorney needed in most jurisdictions, relatively low filing fees

Cons: Time-consuming (hearings, paperwork), may still need to enforce judgment separately, limited to jurisdictional amounts

Jurisdiction-Specific Procedures

United States: File in Small Claims Court in the county where the debtor is located or where the contract was performed. Serve the defendant with proper notice. Bring all documentation: contract, invoices, correspondence, proof of delivery. If you win, you may need to use wage garnishment or bank levies to enforce the judgment.
United Kingdom: File through Money Claim Online at gov.uk/make-money-claim. Court fee varies by claim amount (percentage-based). If the defendant does not respond within 14 days, you can request a default judgment. Enforcement options include bailiff collection, attachment of earnings, or a charging order against property.
Nigeria: Engage a licensed legal practitioner to file a writ of summons in the appropriate court. The Magistrate Court handles smaller claims while the High Court has jurisdiction for larger amounts. Judgment enforcement may involve the court bailiff seizing assets or garnishing accounts through a garnishee order.
Canada: File in Small Claims Court in the province where the debtor resides or conducts business. Many provinces allow online filing. Serve the claim according to provincial rules. If you obtain a judgment, enforcement tools include garnishment, seizure and sale of assets, or examination hearings to discover the debtor's assets.

What to Document

Record: All correspondence, legal filings, agency agreements, court dates, judgment details

Checklist