Collecting Outstanding Receivables – How to Secure Your Cash Flow with Structure and Automation

Outstanding invoices cost you money – and time

Every unpaid invoice is a threat to your company’s liquidity. Whether it’s €100 or €10,000 – outstanding receivables can quickly add up and become a serious burden on your cash flow. For small and medium-sized enterprises (SMEs) in particular, this can turn into a major risk. According to studies, around 20% of corporate insolvencies in Germany are caused by unpaid customer invoices.

Those who systematically collect outstanding receivables not only protect their liquidity but also improve internal processes and gain financial predictability. In this article, you'll learn how to manage open receivables effectively, the legal considerations involved, and how KLEVERBILL helps automate the entire dunning and collection process – saving you time, money, and stress.

1. What are outstanding receivables?

Outstanding receivables (also known as open items or unpaid invoices) are invoices that have been issued but not yet paid by the customer, despite the due date having passed.

An effective receivables management process includes:

• Clear visibility of all open invoices

• Monitoring payment deadlines

• Sending timely reminders and payment notices

• Escalating to collections or legal action when necessary

Common causes of overdue payments:

• Incomplete or incorrect invoices

• Lack of follow-up routines

• Vague payment terms

• Poor credit ratings of customers

2. Why managing receivables is critical for your business

According to a Creditreform survey, over 60% of SMEs say that unpaid invoices negatively impact their financial planning. A structured approach to receivables management can significantly reduce such risks and improve liquidity.

Benefits of active receivables management:

• Predictable cash flow and improved financial control

• Faster payment cycles

• Reduced manual effort through automation

• Better customer communication and transparency

• Early detection of problematic customers

3. How to collect outstanding receivables – step by step

A structured receivables collection process typically includes the following stages:

Step 1: Invoice issuance

• Accurate and complete invoicing with clear payment terms

• Preferably sent in a digital and compliant format

Step 2: Monitor incoming payments

• Regular reconciliation of open items and bank transactions

• Automatic due date tracking via dashboards

Step 3: Friendly payment reminder

• Sent shortly after the due date via email or mail

• Friendly and professional tone to maintain customer relations

Step 4: First and second dunning letters

• More urgent tone

• Option to include late fees or interest charges

Step 5: Final notice or handover to collections

• Final deadline and possible legal consequences

• Case transfer to an in-house or external collections partner

4. Legal requirements for collecting outstanding invoices

To ensure compliance, businesses must follow the legal guidelines outlined in the German Civil Code (BGB):

• A customer is automatically in default once the due date passes – or 30 days after invoice issuance if no due date is specified (§ 286 BGB)

• A reminder is not legally required but is recommended for documentation

• Late payment interest can be charged (e.g., 9% above base rate in B2B transactions)

• Reminder fees must be reasonable (typically €2.50–€5.00)

All communication must be documented and traceable in case of future disputes or legal action.

5. Automating receivables management with KLEVERBILL

KLEVERBILL takes the pressure off your accounting department by automating the entire receivables process – from invoice creation to dunning and collections.

✔ Real-time monitoring of all outstanding invoices✔ Customizable dunning workflows with automated reminders✔ Multilingual dunning (DE/EN/FR)✔ One-click handover to debt collection or legal enforcement✔ Legally compliant documentation of all communication✔ Integration with accounting systems and payment tracking tools

💡 You always have full visibility over who owes you money, when it's due, and what actions have been taken.

6. Conclusion: Collect receivables professionally – with structure and software

Many businesses hesitate to follow up on unpaid invoices out of fear of damaging customer relationships. But when done professionally and transparently, it can actually strengthen trust. With KLEVERBILL, you automate your dunning process, keep all open receivables in check, and ensure consistent cash flow – without overburdening your team.

🎯 Our recommendation: Don’t let unpaid invoices go unnoticed. Collect outstanding receivables systematically – with KLEVERBILL’s digital, secure, and efficient solution.

📞 Phone: +49 711 22863-0

📧 Email: info@kleverbill.de

🌐 Website: KLEVERBILL

Would you like to know how KLEVERBILL can work specifically for your company?Schedule a free, no-obligation consultation – or start directly with a free trial.