Before You Panic, Rule Out the Dull Explanations
An overdue invoice feels personal. Most of the time it isn't. Before you draft an angry email, work through the boring reasons first, because the boring reasons are usually the real ones.
The invoice went to a spam folder. It landed with the wrong person and never reached accounts payable. It's missing a purchase order number, so the client's system rejected it silently. The approver is on holiday. The payment run happens on the 25th and your invoice arrived on the 26th. None of these are malice — they are admin friction, and a single polite message usually clears them.
So your first move is never a threat. It's a nudge that assumes good faith and makes it trivially easy to pay: restate the invoice number, the amount, the due date, and attach the PDF again.
The Escalation Ladder
Chasing payment works best as a series of calm, predictable steps that get firmer over time. You climb one rung at a time and you keep a written record of every rung. The point of the record is twofold: it nudges the client (people pay faster when they can see a paper trail forming), and it's the evidence you'll need if this ever reaches mediation or court.
For the exact wording at each stage, we have a full set of payment reminder email templates you can copy and adapt.
Pick Up the Phone (Yes, Really)
Somewhere between the firm reminder and the formal demand, call them. Email is easy to ignore; a polite, direct conversation is much harder to brush off, and it often surfaces the real blocker — "we never got the PO", "our terms are actually 45 days", "cash is tight, can we split it".
Keep the call friendly and solution-focused. Confirm the amount, ask if there's any issue with the work or the invoice, and agree a concrete date. Then — and this matters — follow up in writing the same day: "Thanks for the call, confirming you'll pay £X by [date]." Now the verbal promise is documented.
The Formal Demand (Letter Before Action)
If polite chasing fails, escalate to a formal written demand. In the UK this is often called a "letter before action" or "letter before claim" — it signals that court is the next step if payment doesn't arrive. It should be unemotional and specific.
A demand letter should state: the invoice number(s) and amount, the original due date, a short history of the reminders you sent, the total now due including any interest, a firm final deadline (commonly 7-14 days), and a clear statement of what happens next if they miss it.
Send it by a method you can prove — email plus, for larger sums, recorded post. Rules and terminology differ by country, so if real money is at stake, it's worth a quick check with a solicitor or your local small-business advice service before you send a formal demand.
Can You Charge Interest and Late Fees?
Often, yes — especially on B2B invoices — but the rules depend on where you are and what your contract says.
In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 gives businesses a statutory right to charge interest on overdue commercial invoices (commonly cited as 8% plus the Bank of England base rate) plus a fixed sum in compensation that rises with the size of the debt, even if your contract is silent on the matter. Our late payment interest calculator can estimate what an overdue invoice has run up. The exact rates and fixed sums change over time and the rules have conditions, so confirm the current figures on GOV.UK before you apply them.
In the US, Australia, Canada and elsewhere, late fees are generally governed by your contract and by local rules that may cap the interest rate. The practical lesson is the same everywhere: put a late-payment clause in your terms and on your invoice from day one, so the right to charge isn't a surprise. Our guide on charging late fees on overdue invoices walks through the wording.
When Chasing Isn't Enough: Outside Help
If the demand deadline passes, you have a few routes, roughly in order of cost and aggression:
- Mediation — a neutral third party helps you reach a settlement. Cheaper, faster and less relationship-destroying than court. Many small claims processes encourage or require it first.
- Debt recovery agency — they chase on your behalf for a fee or a cut of what they collect. Useful when you don't have the time or stomach for it, less so for small sums.
- Small claims court — for modest amounts this is designed to be used without a lawyer. England & Wales handle most claims up to £10,000 on the small claims track via Money Claim Online; US small claims limits vary by state; other countries have their own equivalents and thresholds.
Weigh the sum against the effort. For a £200 invoice, a formal claim may cost more in time and fees than it returns, and "write it off and never work with them again" is a legitimate business decision. For £5,000, it's usually worth pursuing.
Make the Next One Easier to Collect
Most non-payment is preventable at the quoting stage, not the chasing stage. A few habits dramatically cut your odds of being stiffed:
- Take a deposit on larger jobs so you're never fully exposed — see how to ask for a deposit.
- Agree terms in writing before you start, including payment days and a late-fee clause.
- Invoice promptly and correctly — the right details, a PO number if they use them, a clear due date, and a clickable payment link.
- Stage the work for big projects: milestone invoices mean an early non-payer can be stopped before you've delivered everything.
A clean, complete invoice with a clear due date is your first line of defence. Build one in seconds with our free invoice generator, or start from a freelance invoice template.