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Compare a proposed payment recovery process with the recovery you already achieve, then subtract the fees and monthly costs.
Use your figures: Open the calculator. All amounts in the examples are illustrative and can be read in one currency of your choice.
Compare the same group of failed invoices
A recovery report can look encouraging while giving you little evidence about improvement. Some failed invoices would have been paid through existing retries or customer follow-up. The useful business question is how much more a proposed process might recover from the same failed-payment population.
Choose a defined invoice group of records and a fixed recovery window. Decide whether your rate is based on invoice count or monetary value. For a revenue calculation, a value-based rate is the direct fit. Do not combine a count-based failure rate with average revenue without checking whether invoice sizes differ.
Calculate additional recovery, not total recovery
Failed-payment value = billed value × initial failed-payment percentage. additional recovery = failed-payment value × the difference between proposed and current recovery rates. A change from 40% to 60% is a 20-percentage-point improvement, not a 60% uplift applied to all billings.
The calculator applies a fee to the total amount recovered under the proposed process, then subtracts the ongoing recovery-program cost. If your provider charges only on additional recovery, or your current process already has fees, adjust the comparison separately to match the contract. The headline result does not model every possible fee arrangement.
A fee-inclusive example
Assume monthly billed value of 100,000 and an initial failure rate of 5%. Failed value is 5,000. Current recovery of 40% brings back 2,000; proposed recovery of 60% brings back 3,000. The improvement is 1,000.
A 10% fee on the proposed recovered value is 300. Add a fixed monthly program cost of 200 and additional net cash is 500 a month, or 6,000 a year if the month is representative. Quoting the whole 3,000 as additional cash would overstate the improvement.
Find the break-even recovery rate
Under this fee basis, break-even proposed recovery rate = (current recovery rate + monthly program cost ÷ failed-payment value) ÷ (1 − fee rate), with rates written as decimals. The example gives (0.40 + 200 ÷ 5,000) ÷ 0.90 = 48.89%.
This equation requires positive failed-payment value and a fee below 100%. A required recovery rate above 100% means the assumptions cannot break even through recovery alone. Lower costs or a different commercial arrangement would be needed.
Check what the improvement really means
Separate recoverable payment problems from cancelled subscriptions and invalid accounts. Do not assume recovering one invoice guarantees every future renewal. Compare invoice status and cash received after the same observation window. Stripe’s revenue recovery documentation describes recovery features; our example is a constructed comparison, not a promised provider outcome.
If the invoice was never issued, begin with completed-work billing reconciliation. That is an earlier stage of the revenue process.
Related reading
Work through your own numbers
Use the failed payment recovery roi calculator to test a baseline and a cautious improvement. Check the calculation guide if you need help with currencies, sharing or assumptions.
Prepared by ProWorkstack. Examples are constructed calculations, not customer results. See our editorial standards.