Finishing a restoration job and invoicing for the work performed should mean you're one step closer to getting paid. Yet when invoices stay outstanding for weeks or even months, your team can end up spending just as much time chasing restoration payment as they did keeping the job moving.
A clear restoration collections process gives your team a better way to manage that work. It defines which invoices need attention, when to follow up, who needs to take action, and what should happen when payment still doesn't come through.
In this guide, we'll walk through five practical steps for building that process so your team can stay on top of outstanding invoices and keep more of your earned revenue moving toward your bank account.
It’s easy for collections to become reactive. An invoice becomes overdue, someone notices it on the aging report, and then the team starts figuring out who needs to follow up and what has already been done.
The problem is that every overdue invoice represents money your business expected to collect but still doesn't have available. As invoices pile up, that can leave a significant amount of earned revenue sitting in receivables instead of coming back into the business.
Recent payment data shows just how large that gap can get. Atradius' U.S. Payment Practices Barometer found that 43% of the total value of B2B invoices was overdue.
For a restoration company already paying employees and covering ongoing job costs, waiting longer for that money can put even more pressure on available cash.
A defined collections process helps your team address those invoices before they simply become another aging balance. You can decide when follow-up should begin, how often it should happen, and when an account needs more attention.
Consistency is just as important. If one overdue account gets regular follow-up while another goes untouched for weeks, the process still depends too much on who remembers to check it. Following the same collection guidelines gives every outstanding invoice a clear next step instead.
That consistency also carries into how you communicate. Customers and other parties involved in payment receive clear, respectful communication without your team having to reinvent the approach for every invoice.
The goal isn't to control when every payment arrives because restoration professionals can't control every delay.
It's to stay in control of the part they can manage: how quickly the team responds, how consistently they follow up, and how they keep each outstanding invoice moving toward a resolution.
Building a collections process isn't rocket science, as long as it gives your team a clear way to track outstanding invoices and follow through until each account reaches a resolution.
The five steps below give you a practical structure you can adapt to how your restoration business already handles its receivables.
Start by defining the rules your team will follow before an overdue invoice lands on someone's desk.
Clear payment terms should state when payment is due and which payment methods you accept. That's why if you charge late fees or have other terms for overdue balances, it's important that you spell those out as well.
Then decide how your debt collection strategy will handle an invoice once it becomes overdue. When does the first follow-up happen? At what point does an account need to be escalated? Who should get involved if payment continues to stall?
Your customer communication guidelines deserve the same attention. Decide which channels your team will use and how communication should change as an invoice gets older.
Documenting these policies gives your team something consistent to work from. It also helps set expectations with clients early, rather than introducing new terms after a payment problem has already started.
Once your policies are in place, you need to know which invoices actually require attention.
Start with your AR aging report. It shows which invoices remain outstanding and how long they have been unpaid. From there, your team can identify delinquent accounts that are moving further into aging and decide where follow-up should happen first.
Don't base that decision on age alone. A large balance that has been outstanding for 90 days may deserve different attention than an invoice that became overdue yesterday.
An account with a payment commitment already in place may also require a different next step from one your team hasn't been able to reach.
The goal is to give your team a reason for what they work on next. Otherwise, it's easy to spend time on whichever invoice happens to catch someone's attention while more pressing accounts continue to age.
Before following up, check what has already happened with the account.
Has someone promised payment? Is there a dispute holding things up? Is another party involved? Has the customer stopped responding?
Having that knowledge helps your team choose the next action instead of sending another reminder that doesn't address what's actually delaying payment.
Knowing which invoices need attention only helps if your team follows through.
Set a schedule for when customers or other responsible parties should hear from you as an invoice ages. You might send a reminder around the due date, follow up again after a late payment, and increase the level of contact if the balance remains unpaid.
The exact timing will depend on your payment terms and collection policies. What's important is that the team isn't deciding from scratch when to follow up with every account.
You should also define when the approach needs to change. An email may work for an early reminder, while an older or higher-priority account could warrant a phone call or more direct communication.
Templates can handle routine communication while still leaving room for employees to step in when an account needs individual attention.
If several follow-ups haven't moved an invoice any closer to payment, find out what's holding it up.
There could be a dispute, missing information, an unresolved payment issue, or another party involved in the process. In those situations, sending the same reminder again won't necessarily help.
Your escalation process should tell the team when to investigate the blocker, involve someone else internally, or move the account to the next collection action defined by your company.
A follow-up schedule can still fall apart if nobody knows who is responsible for carrying it out.
Give each account or collection task a clear owner. That person should be able to see previous communication, payment commitments, outstanding tasks, and the next action required.
This becomes especially important when several people touch the same account. One employee may send an email, another may speak with the customer by phone, and someone else may need to handle an escalation.
If those interactions aren't recorded in one place, the next person has to piece together what happened before they can move forward.
Your team should be able to open an outstanding account and quickly answer two questions: What has already happened, and what needs to happen next?
Keeping that history organized also helps protect customer relationships by preventing conflicting messages or employees repeating work someone else has already done.
Once someone is ready to pay, don't make completing the payment harder than it needs to be.
Give customers clear instructions for how they can settle their balance. Online payment options, including credit card payments, can reduce extra back-and-forth, while structured payment plans may make sense for accounts where your company has agreed to payments over time.
Then keep an eye on what happens after you put your collection process into practice.
Your AR aging report can show whether balances continue moving into older aging buckets. DSO can help you understand roughly how long it takes your company to collect its receivables.
You can also track how much overdue AR you carry and whether that amount changes over time.
If the same problems keep appearing, go back through the process. You may find that follow-up starts too late, certain accounts aren't being escalated when they should be, or employees are spending too much time managing routine collection work manually.
The process shouldn't stay frozen simply because you've documented it. Use your receivables data to decide what needs to change.
Once you put those five steps together, your collections process should give your team a clear course of action as an invoice moves from approaching its due date to paid.
That doesn't mean every invoice will follow the exact same path.
A customer who simply missed the due date may only need a reminder, while an older account with a payment issue may require a phone call or escalation. But the circumstances surrounding the invoice should help determine what your team does next.
Here's one example of what that could look like:
|
Invoice stage |
Possible collection action |
Goal |
|
Approaching due date |
Confirm invoice and payment details |
Catch potential issues before the due date |
|
Recently overdue |
Follow up and confirm payment status |
Find out when payment can be expected |
|
Still outstanding |
Continue follow-up through the appropriate channel |
Keep the account from sitting without attention |
|
Payment issue identified |
Address the specific issue delaying payment |
Work toward resolving the reason payment hasn't moved |
|
Significantly overdue |
Escalate according to your collection policy |
Decide what action the account requires next |
|
Payment promised |
Record and track the promised payment date |
Follow up if the commitment isn't met |
|
Paid |
Update the account and close outstanding collection tasks |
Keep your AR records up-to-date |
The timing will depend on your payment terms and the circumstances of the account. An invoice doesn't simply sit there until someone remembers to check on it.
Your team should know what happened during the last contact and when they need to follow up again.
If another reminder isn't getting anywhere, they should also know when to switch channels, speak directly with the person responsible for payment, or follow the escalation procedure you've already established.
That gives you a process your team can actually follow while still leaving room to handle each account based on what's holding up payment.
Once you start following a defined collections process, you'll see that impact goes beyond having a better way to chase overdue invoices. Your team can address payment issues earlier and spend less time figuring out what needs attention.
Here are some results you can expect when you manage collections more consistently.
The sooner you collect the money or funds you've already earned from your services, the sooner you can improve your cash flow and put that money back into the business.
Regular follow-up helps keep outstanding invoices moving and gives your team a better chance of addressing payment issues before they drag on, reducing the cost of carrying unpaid invoices.
Over time, that makes incoming cash easier for many restoration contractors to plan around, especially when payroll, equipment, materials, and new restoration jobs compete for the same cash.
An unpaid invoice becomes harder to ignore when your process tells someone to check it, follow up, and take the next action.
That gives your team more opportunities to catch payment issues while there's still something they can do about them. It also reduces the risk of an invoice quietly moving further into your aging report simply because nobody followed up.
Collection conversations don't have to feel uncomfortable or improvised. Clear policies and a consistent follow-up schedule give your team something to work from when they contact customers about payment.
They can see what communication has already happened and continue the conversation without sending mixed messages or repeatedly asking for the same information.
That helps keep the conversation focused on resolving the outstanding balance while maintaining the professionalism customers expect from your restoration company.
Outstanding invoices affect how much cash your business actually has available, regardless of how much revenue you've already earned on completed jobs.
Keeping collection activity organized gives you a clearer view of which balances remain unpaid, how long they've been outstanding, and what your team is doing about them.
With that information in front of you, you can make financial decisions based on what you've actually collected rather than assuming every outstanding invoice will arrive when expected.
Now that you have an idea of what a restoration collections process looks like, it's easier to see that much of the work it takes to keep it running comes down to repeating the same tasks.
There's nothing necessarily wrong with handling those tasks manually. Yet if employees spend hours every week repeating them as your outstanding invoices grow, you'll probably end up spending more time and staff capacity on collections in the long run.
With the right tools, collections automation can take much of that repetitive work off your plate.
You can schedule automated reminders, keep collection activity organized, and give employees better visibility into outstanding accounts without asking them to constantly check spreadsheets or individual inboxes.
It can also streamline other parts of the process. Online payment options give customers a direct way to pay, while reporting helps owners and finance teams see how receivables and collection activity are changing over time.
Automation won't solve every reason a restoration invoice remains unpaid. An insurance delay, dispute, missing information, or mortgage company involvement may still require someone on your team to step in.
But at least with automation, your team can focus on tasks that need their attention while other important tasks run in the background.
AR Workflow gives restoration companies a way to put that automation around the collections process they've already defined.
Your team can build custom collection workflows and schedule email or SMS follow-ups based on how you want accounts handled. Tasks and collection activity stay organized so employees can see what's already happened and what still needs their attention.
AR Workflow also gives owners and finance teams real-time insights into outstanding AR through dashboards and reporting. When a customer is ready to pay, online payment options and payment plans give them a direct way to take care of their balance.
AR Workflow connects with QuickBooks, and your team can manage the collection work surrounding outstanding receivables without relying on spreadsheets and disconnected communication to keep track of it.
The point isn't to remove your team from collections. It's to reduce the repetitive work around the process so they can spend their time on payment issues that actually need someone to step in.
A faster collections process comes down to staying on top of outstanding invoices before they spend months sitting in your AR.
The good news is, AR Workflow was built to be a reliable partner for businesses in the restoration industry that want to get paid on time without all the extra work, stress, and hassle.
Under federal law, the 7-in-7 rule generally limits a covered collection agency to no more than seven phone calls within seven days about a particular consumer debt. After speaking with the consumer by phone about that debt, the collector generally must wait seven days before calling again.
This rule applies to debt collectors covered by the Fair Debt Collection Practices Act (FDCPA) and Regulation F.
The exact stages depend on the type of loss, but a restoration job generally moves through assessment and planning, mitigation, cleaning or drying, and repairs needed to restore the property. Industry guidance also calls for ongoing documentation and monitoring during the work.
From an accounts receivable perspective, the collection process begins once the company has invoiced the completed or billable work and needs to track that outstanding payment.
Debt collectors or third-party collection agencies may eventually reduce or stop collection attempts, but an unpaid debt does not automatically disappear because they stop contacting the debtor.
Collection rights and the time available to take legal action depend on the type of debt and applicable state law.
For restoration companies managing their own receivables, waiting until an account becomes severely aged can make debt recovery more difficult. A defined follow-up process helps the team address outstanding invoices earlier.
There isn't one standard processing time for a collection payment. Timing can vary between payment methods, payment processors, banks, and credit unions, especially if the transaction encounters an issue.