The SaaS CFO’s Dilemma: Chase or Cut Loose?
Unpaid invoices are part of the terrain in SaaS—especially with high turnover rates for business sponsors, expiring credit cards, and limited credit checks during the online sale process. SaaS companies expect that a certain percentage of customers will reach delinquency. .
The real question isn’t whether to escalate—but when.
Use a debt collection agency only after internal AR workflows have failed, and only if the account is truly lost. Once you escalate, recovery comes at the cost of the relationship.
Workflow Integration: Before You Escalate
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Run full dunning cycle: Automated email, statements, and escalation to internal collections
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Log all outreach: Document attempts—required if audited
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Notify internal stakeholders: Sales, Customer Success, and legal must confirm account is unrecoverable
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Send pre-collections notice: One final email warning of transfer to collections
Transfer to agency: Export invoice details, balance, and contact data securely
Cost & Impact
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Fee model: Most agencies charge 25%–50% of recovered amount
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Timing: Expect 30–90 days for resolution (if successful)
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GL impact: Move balance to allowance or bad debt expense
Customer impact: May burn bridge permanently—use only on churned or written-off accounts
SaaS Takeaway
Collections agencies are a cash salvage tool, not a retention play. Escalate only when the account is inactive, unresponsive, and written off internally. If there’s still a CS or renewal path, stay in-house.
Frequently Asked Questions
Never. Escalating while a customer is still using your platform torpedoes trust.
Yes—via AR aging rules in your ERP or billing system. But always insert a manual review before transfer.
Use a global agency with experience in cross-border B2B collections and data privacy compliance.
