docdrive
docdrive

How to chase a late invoice

Late payment is the single biggest cash-flow problem small UK businesses face. The good news: the law is firmly on your side, and most late invoices are settled by a polite, well-timed chase rather than anything dramatic.

Know when it's actually late

If you agreed payment terms, the invoice is late the day after those terms expire. If you agreed nothing, the default for business-to-business transactions is 30 days from either the invoice date or delivery of the goods or service, whichever is later.

Business-to-business terms can be extended by agreement, but terms beyond 60 days must be fair to both sides — you can't be pushed into 90 days simply because a large customer says so.

A chase sequence that works

  • Day 1 after due date — a short, friendly nudge. Assume it was missed, not refused. Re-attach the invoice.
  • Day 7 — a firmer email to the same contact plus accounts payable, restating the amount, the due date and the days outstanding.
  • Day 14 — a phone call. Ask directly when it will be paid and get a date. Confirm that date in writing afterwards.
  • Day 30 — a formal notice stating you'll apply statutory interest and compensation, with a payment deadline.
  • Beyond that — a letter before action, then the small claims route (Money Claim Online) for straightforward debts.

What you're legally entitled to add

Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge statutory interest on overdue commercial invoices at 8% above the Bank of England base rate. Check the current base rate before you calculate, as it moves.

You can also claim fixed compensation for the cost of chasing, based on the size of the debt: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. If your reasonable recovery costs exceed that, you can claim the difference.

This applies to business-to-business transactions, not consumers. Many suppliers never invoke it — but saying that you're entitled to it, calmly, often produces payment on its own.

A chase email you can copy

Keep it short, factual and unemotional. Something like: "Hi [name] — invoice [number] for £[amount] was due on [date] and is now [x] days outstanding. I've attached it again for convenience. Could you confirm the payment date? If it's already been processed, ignore this and thanks."

Escalating tone rarely helps; escalating specificity does. Name the invoice, the amount, the due date, the days late, and ask a direct question that requires a date in reply.

Send a clear, chaseable invoice

Due dates, payment details and sequential numbering — the things that make chasing straightforward.

Make a invoice — free

Common questions

Can I charge interest on a late invoice if I didn't mention it beforehand?
For business-to-business debts, statutory interest applies by law whether or not your terms mention it. Stating your terms up front simply makes it less of a surprise.
Should I stop work if a client hasn't paid?
Check what your contract says before pausing. Many contracts allow suspension for non-payment after notice — but doing it without a contractual right can put you in breach.
Is it worth going to the small claims court?
For clear, documented debts it's relatively cheap and often effective — the letter before action alone resolves many cases. Get advice for anything complex or disputed.

Read next

General information for UK businesses, not legal, tax or accounting advice. Rules and thresholds change — check GOV.UK or speak to a qualified professional for your situation.