To recover money from a business customer, act early and escalate in steps: send a written reminder as soon as the invoice is overdue, stop further credit, follow up by call, then send a lawyer-drafted legal notice if there is still no payment. If the notice is ignored, consider MSME Samadhaan (for Udyam-registered micro and small enterprises), a cheque bounce complaint or a civil suit. An app such as FundRaksha Trust runs the reminders, follow-up calls and notices for you and keeps the record.
The recovery plan, step by step
| When | Step | In FundRaksha Trust |
|---|---|---|
| Before the due date | A friendly reminder with the invoice number, amount and due date. | Receivables shows what falls due; a daily alert flags newly overdue invoices. |
| Just overdue | Polite reminders by call and email. Stop new supplies on credit. | Soft follow-up: scheduled calls and emails within your hours. |
| Overdue for a few weeks | Frequent calls until the buyer responds. | Hard follow-up: calls every 60, 30, 15 or 10 minutes. |
| Still unpaid | A formal legal notice demanding payment by a date. | Legal notice for GST invoices or cheque bounce, digital or by registered post. |
| Gone quiet | Calls and a physical notice together. | Recovery Combo: hard follow-up plus physical legal notice in one order. |
| After the notice | Advocate-led recovery or legal proceedings. | FundRaksha Legal: free onboarding, fee only on what is recovered. |
Keep these documents ready
- The tax invoice with the buyer's correct legal name and GSTIN.
- The purchase order or written terms showing the credit period.
- Proof of delivery: a signed delivery challan, e-way bill, lorry receipt or acknowledgement.
- The party ledger showing the outstanding amount.
- Copies of reminders and the follow-up record.
- For a bounced cheque: the cheque and the bank's return memo.
You can attach invoices and ledgers when you start a follow-up or notice. They are optional but make the notice stronger.
Legal routes after a notice
- Cheque bounce: under Section 138 of the Negotiable Instruments Act, the demand notice must be sent within 30 days of the bank's return memo. If the drawer does not pay within 15 days of receiving it, a complaint can be filed within one month after that.
- MSME Samadhaan: a Udyam-registered micro or small supplier can file a delayed-payment reference before the MSE Facilitation Council. See FundRaksha Legal's guide on filing an MSME Samadhaan case.
- Civil suit for recovery: for other unpaid dues, through a lawyer.
- Time limit: a claim for money is generally barred three years after it falls due, so do not let old dues sit. Older dues may be recoverable only by negotiated settlement.
Remind the buyer that, under GST law, a recipient that does not pay the supplier within 180 days of the invoice date must reverse the input tax credit on that invoice, with interest.
Prevent the next unpaid invoice
Recovery is harder than prevention. Before giving credit, check the buyer by GSTIN, look at its filing record and court cases, start with a small limit and put the terms in writing. See how to check a buyer before giving credit and report non-payers to the defaulter network to warn other suppliers.
Frequently asked questions
How can I recover money from a customer who is not paying?
Send written reminders, stop further credit, follow up by call, then send a legal notice. If the notice is ignored, consider MSME Samadhaan, a cheque bounce complaint or a civil suit. Keep every invoice, delivery proof and reminder.
Is there an app to recover money from customers?
Yes. FundRaksha Trust runs reminder calls and emails, sends lawyer-drafted legal notices and connects to advocate-led recovery through FundRaksha Legal, with every step tracked in the app.
Can I recover money without going to court?
Often, yes. Many buyers pay after firm follow-up or a legal notice. FundRaksha Legal works towards out-of-court settlement for larger dues.
How long do I have to recover an unpaid invoice?
A suit for money generally has to be filed within three years from when the amount fell due. Act well before that.
Is it legal to call a customer repeatedly for payment?
Reminders about a genuine debt are normal business practice, but they must stay respectful. FundRaksha calls only within the hours you set, and you can pause at any time.
This guide is general information for Indian businesses, not legal or tax advice. GST data shown by any tool comes from public records and should be confirmed on the GST portal before you act on it.