Cashflow4 April 20265 min read

How to Chase Overdue Invoices in the UK Without Damaging Relationships

A practical guide to chasing late-paying clients. When to chase, what to say, how to escalate, and how to prevent it happening again.

The cost of not chasing

The average UK SME is owed £8,500 in overdue invoices at any given time. That is cash you have earned, delivered the work for, and cannot spend. Every day an invoice goes unpaid is a day you are effectively lending that client money interest-free while your own bills still need paying.

When to start chasing

The day after the due date. Not a week later, not when you remember. The longer you wait, the harder it gets. Clients who owe money and hear nothing from you assume it is not urgent. A polite but prompt follow-up the day after the due date sets the tone.

The three-stage approach

Stage one is a polite reminder on day one past due. A short email or message referencing the invoice number, amount, and due date. Tone: friendly, professional, assuming it was an oversight. Something like: I just wanted to flag that invoice 1042 for £3,200 was due yesterday. Could you let me know when I can expect payment?

Stage two is a firm follow-up at 7 to 14 days overdue. Phone call preferred over email. Reference the original reminder. Ask directly when payment will be made and get a specific date. If they give you a date, follow up on that exact date if payment has not arrived.

Stage three is escalation at 30 days overdue. A formal letter referencing the Late Payment of Commercial Debts (Interest) Act 1998, which entitles you to charge interest at 8% plus the Bank of England base rate on overdue commercial invoices. You are also entitled to claim a fixed sum as compensation for the cost of recovering the debt.

Prevention is better than cure

Set payment terms clearly on every invoice and contract. Shorten terms where possible. 14 days is better than 30. Consider requiring a deposit or milestone payment for larger projects. And invoice promptly. The sooner the invoice goes out, the sooner the clock starts.

How CFO Pal helps

CFO Pal monitors your debtor book automatically. The moment an invoice passes its due date, it flags in your dashboard and can trigger an alert via email, SMS, or WhatsApp. Your Monday morning summary includes a list of all overdue invoices and their total value. No invoice slips through because you forgot to check.