With 55% of U.S. B2B invoiced sales overdue, businesses need to collect unpaid bills without losing valuable customers.
A harsh approach may recover one invoice but cost years of future business. Research from The Kaplan Group shows that respectful collection methods can improve cooperation, support payment, and protect customer relationships. The relationship is not separate from recovery. It is part of the strategy.
Key Takeaways
- Late payments are a major business risk. About 55% of U.S. B2B invoiced sales are overdue.
- Trust supports customer retention. Forrester found a 30-point gap between trusted and untrusted vendors.
- AI use in collections rose from 49% in 2023 to 93% in 2025, making the human side of complex cases even more important.
The Scale of the Payment Crisis
U.S. businesses face a serious B2B payment problem. Research from The Kaplan Group and the Association for Financial Professionals points to the same trend.
Late payments are now common across U.S. businesses. About 55% of B2B invoiced sales are overdue, and 86% of businesses say late invoices make up as much as 30% of their monthly sales. Small businesses also face a heavy burden. About 56% have unpaid invoices, with an average balance of more than $17,000.
In a 2025 Kaplan Group survey of 100 finance leaders, 82% said late payments caused moderate to critical cash flow problems. The damage can also extend beyond cash flow. About 26% of business decision-makers said they had stopped working with a buyer or supplier because of payment delays. This means the business relationship may already be at risk before a collection agency becomes involved.
The wider business climate adds to the pressure. Business bankruptcy filings reached 24,737 in 2025, rising above pre-pandemic levels. As more companies struggle, collection teams must manage more cases while making harder choices about when and how to pursue payment.
How Trust Affects Revenue
Trust has a clear effect on B2B revenue. Forrester’s research on business buyer trust shows a large gap between trusted and untrusted vendors.
The study found a 30-point difference in customer retention between trusted and untrusted vendors. That gap affects the long-term value of every customer account.
For collection agencies, the lesson is simple. Recovering an invoice is only part of the value they can provide. If an agency also protects trust between a creditor and a customer, it may help preserve future revenue.
Communication, AI, and the Relationship Gap
How collectors speak with debtors can affect payment. About 79% of consumers are more likely to pay when they are treated with respect and professionalism. Research cited from McKinsey, ACA International, Accenture, and Gallup also links respect with loyalty, cooperation, and engagement.
In practice, collectors should not treat every late payment as a conflict. Early delays may come from an error, a cash flow issue, or a simple misunderstanding. A direct conversation can uncover the problem and lead to a workable plan. Clear records of each contact also protect the creditor.
At the same time, the collection workforce is shrinking. It has lost more than 77,000 jobs since 2019, a drop of about one-third. Bankruptcy filings are rising, so fewer collectors are handling more work.
Automation is one reason for this shift. The share of collection firms using AI and machine learning rose from 49% in 2023 to 93% in 2025, according to TransUnion’s annual Debt Collection Industry Report. The Kaplan Group calls the result the collector crunch. It estimates that the number of collectors per 1,000 bankruptcy filings has fallen about 47% since 2022.
AI works well for routine tasks, such as reminders and balance checks. But it is less effective when a case requires judgment, empathy, or a careful reading of the relationship. Bots and fixed scripts can feel cold or rigid, especially to long-term customers and high-value B2B clients.
The goal should not be to reject AI. It should be to use AI for simple, high-volume work. Skilled collectors can then focus on complex accounts where tone, timing, and judgment matter most.
The Value of Relationship-First Collections
Relationship-first collection creates value at two levels. It can protect the creditor’s relationship with the debtor, and it can strengthen the agency’s relationship with the creditor.
For the creditor, a professional collection process may help return a late account to active status. The Kaplan Group evaluates each matter for the strategic value of the relationship before choosing a collection path. A discounted settlement, for example, can be financially superior to full-value litigation when the customer represents ongoing future revenue. The agency resolves more than 97% of its successful matters without going to court. This approach can reduce legal costs, save time, and limit damage to the relationship.
The same logic applies to the collection agency’s own clients. Companies have a 60% to 70% chance of selling to an existing customer. The chance of selling to a new prospect is only 5% to 20%. Repeat customers also spend an average of 67% more than new customers.
The Kaplan Group works with small businesses and large companies. Some clients place one claim, while others send cases often. Each relationship that the agency keeps can become a source of repeat business. Its reported 85% success rate on large, viable claims also helps build trust and bring clients back.
Does a Relationship-First Approach Actually Work?
Some people believe that relationship-first collection is too soft. They argue that strong pressure leads to faster or larger payments. The operational evidence does not support that view.
Debtors are less likely to cooperate when collectors use threats, shame, or immediate legal action. These tactics can stop communication, which makes repayment harder. Court action can also be slow and costly. Even with a strong legal case, the result is not certain, and the business relationship may be lost.
The Kaplan Group says more than 97% of its successful cases are resolved without legal action. This is not a weak approach. It is a way to improve the chance of recovery while protecting the creditor’s long-term interests.
The current level of relationship risk also supports this approach. About 26% of businesses have already ended a buyer or supplier relationship because of payment delays. A professional collection process does not have to add more damage. In many cases, it can reopen communication and create a clear path toward payment.
Methodology and Sources
This analysis combines proprietary Kaplan Group research with recent third-party data on B2B payments, trust, and retention. The Kaplan-sourced findings come from published Kaplan Group blog analyses and the company’s February 2025 survey of 100 financial decision-makers, including CFOs, VPs of finance, controllers, and directors of finance, at businesses ranging from under $10 million to more than $1 billion in annual revenue.
External sources include Atradius research on U.S. and North American B2B payment practices, Forrester research on business buyer trust and vendor preference, and retention economics commonly used to measure the value of keeping existing customers.