Automated 30-60-90 Day Collections Workflows for SaaS and Professional Services

Automating Collections: A 30-60-90 Day Workflow for Overdue Invoices

For most early-stage SaaS and professional services firms, the finance stack is a pragmatic mix of QuickBooks or Xero, spreadsheets, and a payment processor. This setup works perfectly until it does not. The tipping point for manual accounts receivable processes is typically 15 to 20 invoices per month. Suddenly, ad-hoc follow-ups are no longer enough to manage cash flow effectively.

As invoice volume grows, reminders get missed. Invoices slip past 30, then 60 days overdue, creating cash flow gaps that put payroll and growth plans at risk. Manually tracking who owes what becomes a time-consuming chore that fuels frustration and financial uncertainty. The core challenge is clear: how to systematically automate overdue invoice follow up without alienating the customers you worked so hard to win.

The Right Mindset for Accounts Receivable Automation

Before building any automated collections workflow, a mental shift is required. Founders and operations leads often view collections as a series of awkward, confrontational conversations. This is a trap. The most effective approach is to reframe the issue entirely. This is a process problem, not a people problem.

Late payments are rarely malicious, especially in the B2B world. They are typically a symptom of a forgotten invoice, a bureaucratic payment run, or a contact person who has left the company. Your goal is not to chase people, but to optimize a system. By building an automated collections workflow, you create a predictable, professional, and persistent process that guides customers toward payment. This removes emotion and inconsistency from the equation.

The focus becomes improving a key business metric: Days Sales Outstanding (DSO). DSO measures the average number of days it takes to collect payment after a sale is made. A healthy DSO target for many B2B startups is between 45 and 60 days. A systematic dunning process is the most direct way to achieve this, improving cash flow from invoices and giving your startup the predictability it needs to scale. For a complete overview, see the Invoicing and Collections Process hub for end-to-end workflows.

How to Build Your 4-Phase Automated Collections Workflow

A 30-60-90 day workflow is a pre-programmed sequence of communications that automatically escalates based on how overdue an invoice is. It ensures every invoice gets the right level of attention at the right time, freeing your team from manual tracking. The reality for most pre-seed to Series A startups is more pragmatic. You can build the early stages of this using the reminder features in QuickBooks and Xero, or with simple Zapier integrations, before investing in dedicated payment collection software.

Here’s how to structure your four-phase automated workflow to systematically automate overdue invoice follow up.

Phase 1: Proactive Communication (Before the Due Date)

Proactive communication is the single best way to prevent late payments. The goal here is to be helpful, not demanding. An automated “pre-minder” email ensures your invoice is top of mind and that the client has everything they need to process payment on time. This simple step can resolve issues like a lost invoice or an incorrect accounts payable contact before the due date even arrives.

Action: Send a polite reminder email 3 to 5 days before the invoice due date.

Email Template: Pre-Minder

Subject: Quick Reminder: Invoice [Invoice Number] is due on [Due Date]

Hi [Client Name],

This is a friendly reminder that invoice [Invoice Number] for [Amount] is due for payment in a few days, on [Due Date].

You can view the invoice and pay online here: [Link to Invoice]

If you’ve already scheduled this payment, please feel free to disregard this email. If you have any questions or concerns, just let us know.

Thanks,

[Your Company Name]

Phase 2: The Gentle Nudge (1-30 Days Past Due)

Once an invoice is overdue, the automated follow-ups begin. The tone should remain professional and assume positive intent. Most late payments at this stage are simple oversights, and a consistent, polite nudge is usually all that is needed. The standard initial follow-up cadence for past-due invoices is Day +3 and Day +15. This strikes a balance between being persistent and not becoming a nuisance.

Action: Send automated overdue invoice reminders on Day +3 and Day +15.

Email Template: Day +3 Nudge

Subject: Following Up: Invoice [Invoice Number] is now 3 days overdue

Hi [Client Name],

This is a reminder that invoice [Invoice Number] for [Amount], originally due on [Due Date], is now past due. We haven't received payment yet.

Could you please let us know when we can expect payment? You can access the invoice and pay directly via this link: [Link to Invoice]

If payment has already been sent, please disregard this message.

Best regards,

[Your Company Name]

Email Template: Day +15 Nudge

Subject: Urgent: Invoice [Invoice Number] is now 15 days overdue

Hi [Client Name],

We are following up again regarding invoice [Invoice Number] for [Amount]. It is now 15 days past its due date of [Due Date].

Prompt payment is greatly appreciated. Please use the link below to settle the invoice: [Link to Invoice]

If there's an issue with the invoice or you have a question, please contact us immediately so we can resolve it.

Thank you,

[Your Company Name]

Phase 3: Firm Escalation with Human Intervention (31-60 Days Past Due)

If an invoice remains unpaid after 30 days, the tone of communication must become more firm. While automation still handles the initial outreach, this phase is where targeted human intervention becomes critical. A scenario we repeatedly see is that the automated emails are going to a general inbox or the wrong contact. A human phone call, typically around the 45-day mark, can uncover the root cause of the delay and resolve it quickly.

The goal of this call is discovery, not confrontation. Ask questions like: "I'm calling about invoice [Invoice Number]. Can you confirm you've received it?" or "Is there a better person in your finance department for me to speak with about this?". The goal is clarity, not conflict. The email at this stage should reference your service terms and the potential consequences of non-payment.

Action: Send a firmer automated email around Day +35 and schedule a manual phone call for Day +45.

Email Template: Firm Escalation

Subject: ACTION REQUIRED: Invoice [Invoice Number] is over 30 days past due

Hi [Client Name],

This is a formal notification that your account is seriously overdue. Invoice [Invoice Number] for [Amount] was due on [Due Date] and remains unpaid.

As per our terms of service, accounts that are more than 30 days in arrears may be subject to service interruption. We want to avoid this, but we require your immediate action.

Please make a payment now to keep your account in good standing: [Link to Invoice]

If you are unable to make a payment or believe this is an error, please contact us at [Phone Number] immediately.

Sincerely,

[Your Company Name] Finance Team

Phase 4: The Final Demand (61-90+ Days Past Due)

When an invoice ages past 60 days, the likelihood of collection drops significantly. Your communication must be direct and unambiguous, functioning as a final demand before a business decision is made. This message should convey the seriousness of the situation without being unprofessional. Referencing an external statistic can add weight and objectivity.

For example, according to Atradius's Payment Practices Barometer, only 74% of B2B receivables are collected after 90 days. This context helps the client understand why you are escalating the matter. For businesses in the UK, GOV.UK provides official guidance on late commercial payments and interest. An invoice aging past 90 days requires a decision on write-off vs. third-party collections. This automated email is the last step before that decision.

Action: Send a final demand notice around Day +75 to prompt immediate payment or communication.

Email Template: Final Demand

Subject: Final Notice: Your Account is Over 60 Days Delinquent - Invoice [Invoice Number]

[Client Name],

Despite multiple reminders, invoice [Invoice Number] for [Amount] remains unpaid. Your account is now severely delinquent.

Immediate payment is required to avoid service termination and further collection action. Industry data shows this is a critical window; according to Atradius's Payment Practices Barometer, only 74% of B2B receivables are collected after 90 days. We need to resolve this now.

Pay the outstanding balance immediately via this link: [Link to Invoice]

This is our final communication on this matter before we must review your account for external collections. To discuss this, you must contact our finance lead at [Phone Number] within the next 5 business days.

[Your Company Name]

Choosing the Right Payment Collection Software

Implementing this workflow transforms accounts receivable from a chaotic, manual task into a predictable system for reducing days sales outstanding. What founders find actually works is starting simple. You do not need a complex system from day one. Use the built-in features of your accounting software like QuickBooks or Xero. For practical first steps, see our Credit Control for Startups guide.

When you are ready to move beyond built-in reminders, consider these dedicated accounts receivable automation platforms:

• Upflow: Ideal for SaaS and B2B startups with a moderate invoice volume (20 to 200 per month) using QuickBooks, Xero, or Stripe Billing. It provides excellent workflow customization and analytics for tracking collections performance.
• Kolleno: A strong choice for professional services and B2B companies in both the UK and US that need more advanced features, like integrated payment portals and AI-driven collections predictions. It suits businesses feeling the constraints of their accounting software’s basic features.
• Chargebee Receivables: Best for high-growth SaaS companies already using a subscription management platform like Chargebee Billing. It offers a deeply integrated solution to manage the entire quote-to-cash lifecycle, including complex dunning for subscription-based revenue.

Metrics for Measuring Collections Performance

An automated collections workflow is only effective if you measure its impact. Tracking the right metrics helps you understand what is working and where your process needs adjustment. Focus on these key indicators, which can be tracked in your accounting software or a dedicated AR platform:

1. Days Sales Outstanding (DSO): As mentioned, this is the most critical collections metric. The formula is (Total Accounts Receivable / Total Credit Sales) x Number of Days in Period. A falling DSO means you are collecting cash faster.
2. Average Days Delinquent (ADD): This metric shows the average number of days your invoices are past due. It helps you pinpoint whether your overall portfolio is aging in the wrong direction, even if DSO looks stable.
3. Collection Effectiveness Index (CEI): This measures how much of the money owed to you was actually collected in a given period. A CEI close to 100% indicates a highly effective process.

Regularly reviewing these metrics will help you refine your email cadences, phone call scripts, and overall strategy for improving cash flow from invoices. For companies dealing with persistent non-payers, our Collections Outsourcing guide provides the next steps.

Ultimately, the goal of accounts receivable automation is to ensure your business gets the cash it has earned on time. A systematic workflow protects your runway, reduces financial uncertainty, and frees you to focus on building your business, not chasing invoices. You can continue exploring this topic at the Invoicing and Collections Process hub.

Frequently Asked Questions

Q: What happens if a customer replies to an automated collections email?
A: Your accounts receivable automation software should immediately pause the sequence for that customer. This prevents them from receiving further automated reminders while you handle their query personally. The goal is to let automation handle the silence, while your team handles the conversation.

Q: Is it possible to automate collections without sounding like a robot?
A: Yes. The key is to write your email templates with a helpful, professional tone, especially in the early stages. Use placeholders for the client's name and invoice details to personalize each message. The templates provided above are designed to sound human and assume positive intent.

Q: At what invoice volume should we invest in dedicated accounts receivable automation software?
A: Most companies feel the pain of manual collections around 15 to 20 invoices per month. This is a good time to start exploring dedicated tools like Upflow or Kolleno. Below this volume, the built-in reminders in QuickBooks or Xero are often sufficient.

Q: Can we pause the automated workflow for a specific customer?
A: Absolutely. Any good payment collection software allows you to manually exclude specific customers or invoices from automated sequences. This is essential for high-value clients, customers on special payment plans, or those with whom you have an ongoing dispute that requires manual handling.