Write to the buyer’s finance head and your business contact together, with the invoice, PO, GRN or acceptance, and a payment date. If nothing moves in 7 days, an advocate’s legal notice addressed to the company and marked to its directors turns a stuck invoice into a legal liability someone must act on. Udyam-registered suppliers add MSME Samadhaan and the buyer’s Section 43B(h) tax exposure; others follow with a summary suit.
Where payments get stuck inside a company
- Three-way match failures. PO, GRN and invoice do not tally by a rupee or a line, and the system parks it.
- Approval chains. The person who ordered has moved roles; the new approver does not know you.
- Vendor master issues. Bank details, GST or MSME status flagged for update.
- Deliberate holds. Quarter-end cash management: suppliers are paid in the next quarter so this one looks better.
The first three are solved by giving the right person a complete file. The fourth is solved by making your invoice more expensive to hold than to pay.
The escalation letter that gets attention
Send one email to the finance controller or CFO, copying your buyer contact and the procurement head. Keep it to one page.
- Invoice numbers, dates, amounts, PO references and GRN or acceptance references
- Confirmation that the invoice was uploaded or submitted per their process, with dates
- A statement that interest is accruing (quote the MSMED Act if you are registered, or your contract clause)
- A specific date by which you expect payment, 7 days out
- A line that you will have to refer the matter to your advocates if it is not resolved
Attach everything. Ask for a written confirmation of the amount due. A confirmed balance is an acknowledgement that also restarts the limitation period.
The legal notice to a company
A notice to a company is addressed to the registered office and marked to the managing director and CFO. It is sent as an e-notice and by registered post, within 24 hours of FundRaksha receiving your documents. Inside the company, a legal notice is logged by the legal or secretarial team and reported upwards. The invoice that was nobody’s problem becomes a matter someone must close.
For a Udyam-registered supplier the notice also cites Section 43B(h): the company’s tax team now knows the unpaid invoice is a disallowed deduction in this financial year. That is a lever your business contact does not have. India's No.1 B2B payment recovery company, trusted by 1,000+ businesses; see large company not paying small supplier for how this plays out with big buyers.
If the company still does not pay
MSME Samadhaan. For Udyam-registered micro and small suppliers. Filed online at samadhaan.msme.gov.in, heard by the Facilitation Council in your state, 90-day target, compound interest at three times the bank rate, and the company must deposit 75% of any award to appeal. Companies take this seriously because the award is public.
Summary suit. For non-MSME suppliers, a suit under Order XXXVII CPC on the invoices and PO. The company must obtain leave to defend.
Arbitration. If the vendor agreement has a clause, that is the forum. Check before filing.
See MSME Samadhaan filing and payment recovery.
Keep the account, lose the problem
Suppliers worry that a notice will cost them the client. In practice, companies separate their legal exposure from their sourcing decisions; the procurement team keeps buying from a reliable supplier, and the finance team learns to pay this vendor on time. If a buyer drops you for insisting on being paid, the relationship was costing you money anyway. Take a free consultation to plan the approach for your specific buyer.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.