Waiting on Unpaid Clients Is a Mistake: A Hidden Source of Lost Revenue

According to the American Collectors Association, about 13% of business accounts are overdue at any given moment. Nick Cherry, division president at Phillips & Cohen Associates, says the problem goes beyond unpaid invoices — every hour spent chasing them eats into time a company should be investing in growth.

Many small-business owners, wary of straining customer relationships, drag the process out by trying to resolve it internally. Cherry calls this a clear mistake: handled properly and with tact, collections don't have to damage a brand's reputation or its customer relationships — a fresh voice can sometimes even help reopen channels that had gone quiet.

Cherry offers an example from his own experience: his team worked with an auto lender that had been collecting debts in-house. An audit found the outreach was disorganized, communication channels and payment options were severely limited, and compliance and training fell short. With the team's help, the company more than doubled its net collection rate within six months.

Cherry also pushes back on a common assumption: professional collectors don't get results through aggressive tactics, but through a fast, multichannel approach tailored to each customer and backed by investment in self-service options.

The longer an overdue account goes unpaid, the lower the odds of collecting it in full. Left unattended, a handful of overdue invoices can turn into thousands — or even millions — of dollars in lost revenue, capital that could otherwise be reinvested in hiring, innovation, or customer service.

The most resilient companies aren't the ones that never run into overdue accounts, Cherry says — they're the ones that catch the warning signs early, act decisively, and bring in the right experts when the moment calls for it.