If an invoice is more than 60 days overdue and the buyer has not given a dated commitment in writing, escalate now. Send a formal demand with a 7-day deadline, then an advocate’s legal notice. For Udyam-registered suppliers, interest at three times the RBI bank rate has been accruing since day 46 and MSME Samadhaan is open. For everyone, the 3-year limitation period is running and a summary suit is available. Delay helps only the buyer.
What months of delay actually cost you
- Working capital. You have borrowed, or forgone, that cash. At a typical business overdraft rate, a six-month delay on a ₹10 lakh invoice is tens of thousands of rupees in interest you absorb.
- GST already paid. You remitted output GST on the invoice in the month you raised it, out of your pocket. See GST paid but buyer not paid.
- Collection probability. The longer a debt is unpaid, the less likely it is paid at all. Buyers in trouble pay the creditors who push.
- Limitation. The three-year clock does not pause while you wait politely.
Use the late payment interest calculator to put a number on what the buyer owes you for the delay.
A simple escalation timeline
| Days overdue | Action |
|---|---|
| 1 to 15 | Friendly reminder with invoice; confirm it is in their system |
| 15 to 30 | Formal written demand with all documents; ask for a dated commitment |
| 30 to 60 | Final demand; stop further credit supply; state that interest is accruing |
| 60+ | Advocate’s legal notice (FundRaksha sends it within 24 hours) |
| After the notice period | MSME Samadhaan, Section 138 (if a cheque bounced), or summary suit |
If you are already at 6 or 9 months, skip to the notice. There is nothing to gain from repeating the earlier steps.
Why the buyer is still not paying after months
By this stage the buyer has decided that you will wait. Reminders have become background noise. What changes behaviour is a credible external cost: interest that compounds, a Council hearing, a court filing, or the buyer’s own tax consequences under Section 43B(h) if you are an MSME. A legal notice from an advocate brings all of these into view at once, which is why so many months-old invoices are paid within weeks of one being sent.
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The route depending on who you are
Udyam-registered micro or small enterprise. Legal notice stating the statutory interest, then MSME Samadhaan. The Council aims to decide within 90 days, and the buyer must deposit 75% of the award to appeal. See MSME Samadhaan filing.
Supplier holding a bounced cheque. Section 138 complaint; strict timelines, so act immediately. See cheque bounced, what to do.
Any other supplier with clear invoices. Summary suit under Order XXXVII CPC, or arbitration if the contract provides. See trade debt recovery.
Do not let it become a 3-year problem
If the invoice is approaching two years, get a written acknowledgement of the balance or a part payment from the buyer, which restarts limitation, or file before the period ends. See payment pending 3 years, limitation. Book a free consultation; FundRaksha will check your dates and tell you how much time you have.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.