Designing a Collections Process for B2B SaaS

In most SaaS companies, cash collection can become problematic long before Finance hits “send.” Small misses, such as what to put on the invoice, who it belongs to, where it routes, and when billing starts, can cause rework and create delays. Days slip, then weeks, and collections turns into preventable chase work.

This guide gives you the upstream checklist, a clear decision map, a lean communication sequence, and the metrics that matter.

Quick takeaways

Get inputs early - Capture PO/PR, routing, tax, and the billing trigger at the verbal “yes.”
Set policy with owners - Define guidelines for extensions, settlements, suspension, write-offs, and who approves each.
Automate outreach - Use a standardized flow: a pre-invoice heads-up, a reminder before the due date, and targeted escalations after the due date.
Separate fixes from disputes - Route defects for same-day reissue; time-box resolutions, and document decisions.
Track leading signals - Monitor DSO, invoice prep time, first-pass acceptance, escalation timeline, and cohort movement out of aging buckets.

Start at “yes,” not at “due”

Treat the verbal “yes” as the kickoff. The goal is a first invoice that is complete, correctly routed, and payable on the first pass.

Get a head start by collecting the following information early:

Procurement path - Confirm required vendor docs (W-9/W-8, bank verification, insurance/security forms), portal enrollment, and whether a PO/PR must be indicated on the invoices.
Identifiers - Record legal entity, contract/SOW or renewal ID, PO/PR, project codes, and any customer-required fields needed for the invoice.
Billing trigger - Define what starts billing: signature, acceptance, or usage.
Terms - Lock final payment terms post-negotiation and note any customer-specific exceptions.
Routing - Capture the accounts payable inbox address, named approver, backup contact, and attachment rules (for example, PO on the face, SOW attached.)
Tax - If exempt, collect certificates now. Map product tax codes and jurisdictions in your tax engine.

When this checklist is standard, invoices go out quickly and clear AP cleanly. Ideally, your billing platform pulls data from your CRM and automatically parses your contracts, so finance isn’t manually retyping information or chasing details later.

Document your policy

With a clear policy, collections become routine, not reactive. It gives your team default answers, owners, and timelines that keep cash moving.

At a minimum, cover:

Invoice corrections - Assign who fixes routing, PO/PR, tax, entity, or math defects and hold a same-day reissue SLA.
Tax exemptions and refunds - Require certificate verification, define re-bill/refund criteria, and list the documentation to retain.
Service at risk and suspension - State notice timing, scope limits, reinstatement steps after payment, and handling for strategic accounts.
Due-date extensions and term overrides - Allow short extensions only with proof of payment (remittance ID, ACH trace, or wire reference), set dollar and frequency limits, and require documentation for each exception.
Payment plans - Define standard structure, eligibility criteria, and a one-page agreement template.
Settlements and discounts - Set limits by deal size, require written rationale, and flag out-of-policy deals for explicit approval.
Write-offs and agency placement - Set aging thresholds, review cadence, minimum balance rules, and approval flow.

You don’t need a flowchart for every edge case. A baseline keeps decisions repeatable, documented, and quick. It is also recommended to have your legal, risk, finance and sales team all in agreement for the best policy.

Plan your communication

Automate where possible and keep the sequence short, specific, and easy to act on.

3 days before the invoice date - Alert that an invoice is forthcoming.
Invoice date - Send to the confirmed AP inbox with required identifiers on the face, correct tax, and clear remittance instructions.
5 days before due - If still unpaid, send a reminder.
1 day after due - Nudge once with a single ask and all identifiers (invoice number, PO/PR, amount, due date.) CC the named approver.
5 days late - Cite the governing clause that controls payment timing (terms or acceptance trigger.) CC the account executive and/or customer support rep assigned to the account.
15 days late (service warning) - If permitted by contract, issue a “service at risk” notice with a payment deadline and steps to avoid interruption. Offer a phone call to discuss options. CC the customer’s CFO or finance lead.
Suspension notice (per policy) - Send a formal notice with reinstatement steps. Pause follow-up once payment is detected.

Your tooling should let you verify the sender identity, customize the wording per customer or segment, and loop in the account executive or customer success rep where helpful.

Reduce dispute friction

Keep momentum by separating fast fixes from true disagreements and by putting a timer on both.

Typos or missing details - Fix routing, PO/PR, tax, entity, or math errors the same day feedback arrives; reissue immediately and confirm receipt.
Contract interpretation - Respond within one business day, quoting the relevant clause(s) from the signed order form, MSA, or acceptance record. If the contract language is ambiguous or the customer pushes back, bring legal in before you reply.
Acceptance or milestone disputes - Build an evidence pack (acceptance criteria; delivery ticket or change log; usage or uptime snapshot.) Get the account executive, implementation manager, and the customer’s approver on a 15-minute verification call within two business days. If criteria are met, document acceptance on the invoice and reissue. If not, pause billing until the criteria are satisfied.
Payment-in-transit delays - When the payer claims “sent,” request remittance ID, ACH trace, or wire reference. Pause outreach for up to five business days while the transaction completes and set a date for follow-up.

The goal isn’t to make disputes disappear; it’s to stop them from dragging. Speed and clarity reduce further delays.

Measuring success

Once your updated policy and cadence are live, track DSO alongside leading indicators that predict cash speed.

Days sales outstanding - Average days to collect payment after a sale; compare to contracted payment terms.
Invoice prep time - Time from the end of the billing period to an invoice being finalized and ready to send.
First-pass acceptance - Percentage of invoices paid without reissue or dispute (target 90% or more for established customers.)
Cohort aging movement - Share of each billing cohort that returns to “current” (0-30) after intervention vs. falls into 61-90.
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Escalation timeline - Median time to pay for escalated invoices vs. nonescalated peers.

If these trend the right way, cash arrives faster with fewer touches, and customers see a cleaner process.

Make collections fast and predictable

Subscript automates billing, revenue recognition, and SaaS metrics so Finance can move cash faster with less manual work.

Want to see it in action? Schedule a demo.

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