Unpaid Invoices: A Simple Guide For Freelancers & SMEs
A P.O. number (Purchase Order number) on an invoice is a reference code from your client. Learn what a P.O. number means, why clients ask for it, how to add it correctly, and why it helps you get paid faster.
Unpaid invoices are among the most common — and most frustrating — problems freelancers and small- and medium-sized enterprises (SMEs) face. You deliver great work, send a professional invoice, follow up politely… and then silence. Weeks turn into months, cash flow tightens, and you start wondering whether you’ll ever see that money.
The good news is that most unpaid invoices are not malicious. They occur due to poor communication, client oversight, internal delays, or simple forgetfulness. With the right approach, you can dramatically reduce the number of unpaid invoices and recover money that is rightfully yours.
This comprehensive guide is written in plain language and covers everything freelancers and SMEs need to know in 2026:
Why invoices go unpaid (the real reasons)
How to prevent most non-payment before it happens
The best step-by-step process to follow up on late invoices
When & how to escalate (politely but firmly)
Legal & practical options if the debt becomes seriously overdue
Tools & habits that make the whole process easier
1. Why Invoices Go Unpaid (The Honest Reasons)
Understanding the “why” helps you prevent 70–80% of cases.
Client forgot — most common reason (especially with busy small/medium companies)
The invoice got buried — lost in the email inbox, went to spam, and the and the wrong person received it
Internal approval delay — needs manager/director/finance sign-off
Cash flow problems on the client side — they want to pay but can’t right now
Dispute or dissatisfaction — they think something is wrong with the work
No clear terms upfront — client assumed “pay whenever” or “30–90 days”
You didn’t follow up soon enough — silence breeds more silence
Wrong payment details — client tried to pay, but the details were incorrect
Very few clients are truly trying to scam you. Most unpaid invoices are solved with better prevention and persistent (but polite) follow-up.
2. How to Prevent Most Non-Payment Before You Even Send the Invoice
Prevention is 10Ă— easier than chasing money.
Get agreement in writing before starting work. Use a simple contract, proposal, or email confirmation that includes:
Exact scope of work
Total price (or hourly rate)
Payment terms (e.g., 50% deposit, 50% on completion)
Due date/number of days (Net 7, Net 15, Net 30)
Late fee clause (e.g., “1.5% monthly interest after due date ”)
Accepted payment methods
Always ask for a deposit; 30–50% upfront is standard for new clients or projects over $500–$1,000. Serious clients pay deposits. Non-serious ones disappear — better to know early.
Send invoices immediately. Same day or next day after milestone/completion. Prompt invoices get paid faster.
Make invoices crystal clear: specific descriptions, no vague lines (“services rendered”), Bold total, clear due date, visible payment instructions
Use professional tools.s GenerateInvoice.net (free, no signup) gives clean PDFs, shareable links (client views online), and tracks if they opened it.
3. Step-by-Step Follow-Up Process (The Polite But Firm Way)
Most invoices that are eventually paid are paid after 1–3 follow-ups.
Day 0 — Send the invoice
Use a strong email (see templates in previous articles) with a shareable link and PDF.
Day 3–5 before due date — Friendly pre-due reminder
Subject: Quick Reminder – Invoice #[number] Due [date]
“Hi [Name], just a heads-up that invoice #[number] for $[amount] is due on [date].
Here’s the link again: [link]
Let me know if you need anything. Thanks!”
Day 3–7 after due date — First overdue message
Subject: Invoice #[number] Now Overdue – Quick Check
“Hi [Name],
Invoice #[number] for $[amount] was due on [date] and is now overdue.
No worries — these things happen.
View/pay here: [link]
Please let me know when I can expect payment or if there are any issues. Happy to help.”
Day 14–21 after due date — Firmer follow-up
Subject: Overdue Invoice #[number] – Action Needed
“Hi [Name],
I’ve now followed up twice about invoice #[number] ($[amount]), due [original due date].
It is now [X] days overdue.
To avoid late fees of 1.5% per month (as stated in the invoice terms), could you please process the payment or let me know your expected date?
Link: [link]
Thank you — looking forward to your reply.”
Day 30+ after due date — Final notice (last polite step)
Subject: Final Notice – Invoice #[number] – [X] Days Overdue
“Hi [Name],
This is the final friendly notice regarding invoice #[number] for $[amount].
It is now [X] days overdue, and late fees are accruing.
If payment is not received by [final date, e.g., 7 days from now], I will need to consider next steps (small claims, collection agency, etc.).
I’d prefer to resolve this amicably — please reply or pay here: [link]
Thank you.”
4. When & How to Escalate (If Polite Doesn’t Work)
If nothing works after 45–60 days:
Send a formal demand letter (template online or from a lawyer)
Offer a payment plan — sometimes clients accept 2–3 instalments
Use small claims court (low cost, no lawyer needed in many countries for amounts under $5,000–$10,000)
Hire a collection agency (they take 20–40% commission)
Write off as bad debt (only after reasonable efforts — can be tax-deductible in many countries)
5 Tools That Make Chasing Unpaid Invoices Easier
Auto-saves every invoice → quick reference
Shareable links show when the client viewed it
Add the late fee text automatically on every invoice
Free spreadsheet (Google Sheets)
Columns: Invoice #, Client, Amount, Date Sent, Due Date, Status, Last Follow-up, Notes
Free/low-cost apps
Wave: Free tracking + reminders
Zoho Invoice (free tier): Auto-reminders
Invoice Simple: Mobile app + view notifications
Quick Summary & Action Plan
Most unpaid invoices are solved with:
Clear terms & deposit upfront
Immediate invoicing with a professional look
Polite, persistent follow-ups (3–4 messages over 30–45 days)
Easy payment options
Good record-keeping (use the GenerateInvoice.net history)
Start today:
Go to https://generateinvoice.net — create your next invoice with clear terms & late fees, send it with a strong email, and track it in the history. Free, instant, no signup needed.