For a small supplier, one unpaid invoice can decide whether salaries, rent and raw material bills get paid on time. Delayed payments are one of the biggest cash flow problems for micro and small enterprises in India. This guide covers your rights and the practical steps for MSME delayed payment recovery in India.
Know the 45-Day Rule
Under the MSMED Act, a buyer must pay a micro or small supplier within the agreed time, which cannot be more than 45 days, or within 15 days if there is no written agreement. If your buyer is past this limit, you have grounds to act.
Buyers Have a Tax Reason to Pay
Section 43B(h) of the Income Tax Act adds pressure on buyers. Buyers can claim a tax deduction on purchases from micro and small enterprises only if they pay within the prescribed timeline. A polite reminder of this rule often gets a faster response.
Steps to Take When Payment Is Late
Check your paperwork. Keep invoices, purchase orders, delivery proofs and any written agreement together.
Send a written reminder. Mention the invoice number, the amount and the due date.
Follow up by phone and email, and note the date and outcome of every contact.
Send a formal notice if reminders are ignored.
File a claim through the official route. The MSME ODR portal is the route for new delayed payment references, while Samadhaan handles cases already pending.
Consider professional recovery support for large or stubborn dues.
When to Use a Recovery Partner
If a buyer keeps delaying, a recovery partner can negotiate, follow up in person and escalate when needed. PayAssured lists MSME delayed payment recovery, negotiation and settlement support, and legal recovery assistance among its services. This lets you focus on production and sales instead of chasing money.
Protect the Relationship
Many MSMEs depend on a few large buyers. Stay professional, put everything in writing and offer reasonable payment plans where it makes sense. A firm but respectful approach keeps the door open for future orders.
Prevent Delays Next Time
Put payment terms in writing before work starts.
Invoice on time and with complete details.
Check a new buyer’s payment history before large orders.
Review overdue invoices every month and follow up before the due date.
Final Thoughts
Delayed payments are common, but you have rules, tools and partners to help you recover what you are owed. Act early, keep clean records and escalate in steps. To get help with overdue invoices, you can contact PayAssured.
