And What We Can Help You Do About It
Fast-moving innovation. Recurring revenue. Long sales cycles. If you’re a SaaS or software company, your business model is built for scale, but not necessarily for collections. And that’s where the problems begin.
Many tech companies, even wildly successful ones, find themselves sitting on piles of unpaid invoices, unsure how to respond without risking key accounts or investor confidence.
Let’s break down why it happens, and what to do before those balances turn into write-offs.
The Nature of Tech Business Models Makes Debt Recovery Tough
Most software companies don’t chase down overdue accounts aggressively. That’s not negligence, it’s just not their DNA. Here’s why:
- Subscription revenue = blurred urgency. When customers fall behind on monthly billing, it’s not always clear when to pause service or escalate payment demands.
- Product teams stay product-focused. Engineers and execs are usually heads-down building new features, not reviewing accounts receivable.
- Sales relationships complicate follow-ups. Account managers don’t want to jeopardize renewals by pushing collections too hard.
- High-margin tolerance. Especially for VC-backed startups, tolerance for delayed payments can seem harmless, until it isn’t.
The result? Delinquent accounts often linger for months, then quietly get written off.
5 Reasons Tech Companies Accumulate Unpaid Invoices
- Too much trust in client intent. You’re working with respected firms, so you assume they’ll pay, eventually. Unfortunately, that’s not always true.
- No collections infrastructure. Many SaaS businesses skip formal AR processes in favor of automation or polite email nudges.
- Customers with leverage. If you rely on a few key logos, your negotiating position weakens when payment delays occur.
- Avoidance of confrontation. Tech companies prize relationships and retention. That often leads to inaction in the face of clear nonpayment.
- Third-party agencies lack impact. When you do escalate, generic collection firms fall flat, especially when legal complexities are involved.
What To Do About It: Options That Actually Work
If you’re dealing with overdue tech invoices, especially accounts worth $10,000 or more, it’s time to rethink your recovery strategy. Here’s where to start:
1. Know When to Escalate
If you’ve made multiple contact attempts, and payment remains outstanding after 60–90 days, it’s time to bring in help. Especially if:
- The client has stopped responding
- There’s no dispute, just silence
- The balance is material to your business
Not sure if it’s time? See: When Should a Software Company Escalate to Legal Debt Collection?
2. Avoid Retainers or Hourly Legal Fees
Chasing unpaid invoices shouldn’t drain your budget. That’s why contingency-based recovery, where you only pay if funds are collected, is ideal for tech firms managing risk.
3. Use Attorney-Based Pressure
A strongly worded demand from an attorney carries weight, especially with companies who’ve been playing payment games with multiple vendors. It’s also more tactful than sending your account to collections.
4. Protect Your Reputation
Reputable legal recovery firms will work with you to preserve relationships. You decide the tone, firm but fair, or aggressive and immediate.
The Bottom Line, Protecting Your Bottom Line
Unpaid tech invoices aren’t just a nuisance, they’re a drag on cash flow, investor confidence, and long-term growth. But they don’t have to be inevitable.
With the right partner, you can recover what’s owed without burning bridges or chasing debt blindly. At Stevens & Ricci, we work with software, SaaS, and technology companies to recover large unpaid balances, using an attorney-driven strategy that puts pressure where it counts.
Only take action when it’s strategic. But once you do, make sure it works.
