How to Collect on Aged Receivables (60+ Days)

Money you already earned but never collected is the saddest line in a home services P&L. The truck rolled. The parts came off the shelf. The tech burned a day. The customer signed and walked away. And now, two months later, the cash is sitting in someone else's account because nobody chased it.

Ellen Rohr says it plainer than anyone. Cash flow is not profit. A profitable shop on paper can run out of money in real life, and the most common reason is a receivables aging report that nobody opens. Here is how to collect on 30, 60, and 90+ day invoices, when to write them off, and how to prevent the next batch.

What counts as an aged receivable?

An aged receivable is any invoice past your stated payment terms. Most home services shops bill net 15 or net 30. Anything 31 to 60 days out is "aging." Sixty to 90 is "seriously aging." Over 90 is "you are about to write this off if nothing changes."

The rule that costs most shops real money: the older an invoice gets, the less likely you ever collect on it. Industry data on commercial collections is brutal. At 30 days past due, you are still likely to collect over 90 cents on the dollar. At 60 days, that drops to around 70. At 90 days, you are below 50. At 180 days, you are in the 20s. Every week that passes is money moving out of your reach.

What's the escalation ladder for a past-due invoice?

You escalate on a calendar, not on a feeling. The ladder runs from soft and friendly to formal and firm, and you do not skip steps.

Day 1 past due. Automated text. "Hi [name], a quick reminder that invoice #1234 for $487 is due. Tap here to pay: [link]." Half of late invoices clear on this touch alone. The customer forgot, not refused.

Day 7 past due. Automated email plus a second text. Same tone, same link. Add a sentence: "Let us know if there is a question on this invoice."

Day 15 past due. Live phone call from a human. The CSR or office manager. Friendly. "Hi [name], wanted to check in on the invoice from [date]. Is everything alright, or is there a problem with the work we should know about?" This call is the most important one in the ladder. Most customers either pay during this call, or surface a real complaint that gives you a path forward.

Day 30 past due. Formal email and certified-mail letter. Tone shifts from friendly to formal. State the amount, the work performed, the date, and the consequences of non-payment. Reference the lien rights in your state if applicable.

Day 60 past due. Owner or office manager call. Direct, professional, calm. Offer a payment plan if the customer is genuinely struggling. Most receivables that get paid late get paid because somebody offered a plan instead of a demand.

Day 90 past due. Final demand letter, with a deadline. Mention small claims court and collections agency by name. Stop performing any additional work for this customer until cleared.

Day 120 past due. Send to a collections agency or file in small claims, depending on the dollar amount. Most agencies take 25 to 50 percent of what they recover, and they only get paid if they collect, so the math is "70 cents on the dollar of nothing" if you do not.

When do you give up and write it off?

You write it off when the cost of pursuing it exceeds the realistic recovery. For most home services shops, the line is around 180 days for amounts under $1,000, and 12 months for anything larger that has gone to collections or court.

Writing off does not feel good. It is also not free. The write-off is a tax deduction if you are on accrual accounting, which softens it. More importantly, it lets you stop spending time and emotional energy on money that is not coming back, and focus on the receivables you can still collect.

The one thing you do not do is "just leave it open." An open receivable that you have given up on lies to you about your business. The aging report is supposed to be a clean read on what is collectable, not a wishlist.

How do you prevent the next batch?

Most aged receivables are created at the front of the job, not the end. Five changes do almost all the work.

1. Take a deposit on jobs over a threshold. For jobs over $1,500, take 25 to 50 percent up front. Customers serious about the work pay the deposit, customers who were never going to pay get filtered out at the door.

2. Bill at milestones on big jobs, not just at the end. Multi-day install? Progress billing. The work week ends, the invoice goes out, the customer pays before the next phase starts. Roofers, HVAC installers, and remodelers all live and die by this.

3. Move to autopay for service work. A card on file before the job starts. Charge on completion. Some customers push back. Most do not, especially the ones who were going to pay you anyway.

4. Send the invoice the same day, not the next week. Every day you wait to invoice is a day added to the age. Same-day invoicing is the single biggest change most shops can make.

5. Run the aging report every Monday. Five minutes, with the office manager or the owner. Top 10 worst invoices. What is happening with each. Next action by name and date. The act of looking changes behavior.

Where Maximus fits in

The collections ladder dies the day the office is too busy to climb it. Most shops have a great policy on paper and no one running it in practice. So invoices sit, age, and quietly stop being collectable.

Maximus runs the ladder. Day 1 text. Day 7 email plus text. Day 15 the call goes on the CSR's list with full context. Day 30 the formal letter goes out under your name. He tracks every aging invoice, flags the ones where the customer is genuinely stuck, and tells you each morning what came in overnight and what needs your eyes. He sits on top of QuickBooks, Jobber, Housecall Pro, or ServiceTitan, deploys in about 48 hours, and costs $497 a month or 8 percent of the revenue he recovers, whichever is higher.

Recovered receivables are the cheapest revenue you will ever earn. You already did the work.

Frequently asked questions

At what point is an invoice considered aged? Anything past your stated payment terms is aging. Most home services shops bill net 15 or net 30, so anything 31 days out is on the report. Sixty days is when the collection probability drops sharply.

What's the best first step on a past-due invoice? An automated text reminder on day one past due, with a one-tap payment link. About half of late invoices clear on this touch alone because the customer simply forgot.

When do I call versus send a letter? Texts and emails for the first two weeks. A live call at day 15. Letters at day 30 and beyond. The live call at 15 days is the highest-value touch in the whole ladder.

Should I offer a payment plan? Yes, when the customer is genuinely stuck. A real plan with autopay collects most of the money. A demand on a customer who cannot pay collects none of it.

When should I send an invoice to collections? After 90 to 120 days of formal effort and at least one direct conversation with the customer. The agency takes 25 to 50 percent of what they recover, and most do not get paid if they do not collect, so the math is usually worth it.

Can I take a lien on a customer's property? In most states, yes, but the deadlines are strict, usually 30 to 90 days after work completed. Talk to a local attorney before you need to file, not after. The threat of a lien moves most customers to pay before you actually have to file.

Can an AI handle collections? The early ladder, yes. An AI operations manager runs the automated touches, drafts the call list for the CSR, and tracks every invoice through aging. The hard conversations stay human, but the discipline that makes those conversations rare is the AI's job.

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See What He Finds in Your Business. See how much is sitting in your aging report right now, in 60 seconds. Look in the Mirror

Written by Nirav Doshi and Neal Doshi, owners of Temperature Pros Orlando and co-founders of Complete Data Products. Every number here comes from a real home services P&L.

Related: how to collect unpaid invoices faster and the home services revenue leak.