Chasing payments means reminding customers about unpaid invoices on a fixed schedule and escalating one step at a time until the money arrives or the debt goes to court. In the UK, a business customer that pays late also owes statutory interest of 8% a year over the Bank of England base rate and fixed compensation of £40, £70 or £100 per invoice, so every late payment comes with a cost you can put in writing.
This guide sets out a six-stage chase timeline, what to say at each stage, the amounts the law lets you add and the court route in England and Wales. None of it is complicated. The hard part is doing it on time, for every invoice, in the busy months as well as the quiet ones.
The six stages of chasing a payment
A chase timeline works when every unpaid invoice follows the same path. The days below assume 30-day terms and a business customer, so adjust them to your own terms and customers.
| Stage | When | Channel | Goal |
|---|---|---|---|
| 1. Friendly reminder | 5 days before the due date | Catch missing or disputed invoices early | |
| 2. Due date reminder | On the due date | Email and text message | Get the invoice into the next payment run |
| 3. First chase | 7 days overdue | Email, then a phone call for larger amounts | Get a payment date |
| 4. Final reminder | 14 to 21 days overdue | Email showing interest and compensation | Make the cost of waiting visible |
| 5. Letter before action | Around 30 days overdue | Letter by post, copied by email | Give a last chance before court |
| 6. Court claim or handover | After the reply period ends | Online court claim, solicitor or collection agency | Recover the debt |
Ready-to-send wording for stages 1 to 4 is in our payment reminder email templates. The short examples below show the tone that fits each stage.
What to say at each stage
1. Before the due date, check that the invoice arrived
The first message is a service, not a chase. Many late payments start with an invoice that went to the wrong inbox or is waiting for a purchase order number. A short note five days ahead catches these cases while there is still time to fix them.
Example. “Invoice 1042 for £4,800 is due on 30 September. Is there anything you need from us to approve it?”
2. On the due date, make paying easy
Send the amount, the due date and your bank details again, with the invoice attached. A text message works well on the day because it is short and people read it.
Example. “Invoice 1042 for £4,800 is due today. Our bank details are on the invoice we emailed on 31 August.”
3. A week late, ask for a date
Ask a question the customer has to answer, such as when the payment will go out. For larger amounts, call, because a phone call usually gets you a date or a reason within minutes. Record the answer as a promise to pay with a date, and check that date against your bank feed.
Example. “We have not received payment for invoice 1042, which was due on 30 September. When can we expect it?”
4. Two to three weeks late, show the cost of waiting
The final reminder states the amount with statutory interest and the fixed sum, gives a firm date and says what happens next. Only mention steps you will actually take.
Example. “Invoice 1042 is now 21 days overdue. Under the Late Payment of Commercial Debts (Interest) Act 1998 we are adding £70 in fixed compensation and statutory interest, which stands at £32.45 today and grows by £1.55 a day. Please pay by 4 November, otherwise we will send a letter before action.”
5. About a month late, send a letter before action
A letter before action is the formal last step before court. If your customer is a company, the Practice Direction on Pre-Action Conduct asks you to set out the claim concisely and give a reasonable time to reply, which is 14 days in a straightforward case. If the customer is an individual or a sole trader, the Pre-Action Protocol for Debt Claims applies. The letter must then enclose an information sheet, a reply form and a financial statement, and the debtor has 30 days to reply.
6. After the deadline, claim or hand over
If the reply period ends without payment or a credible plan, you can make a court claim yourself, instruct a solicitor or pass the debt to a collection agency. The court route for England and Wales is described below.
What the law lets you add to a late invoice
The Late Payment of Commercial Debts (Interest) Act 1998 covers contracts for goods and services between businesses, including public authorities, but not sales to consumers. Once a payment is late, it gives you three things.
- Statutory interest. 8% a year over the Bank of England base rate. For interest that starts to run between 1 July and 31 December, the base rate is the one in force on 30 June, and for interest that starts between 1 January and 30 June, the one in force on 31 December. Bank Rate was 3.75% on 30 June 2026, so statutory interest that starts to run in the second half of 2026 is 11.75% a year.
- Fixed sum compensation. £40 for debts up to £999.99, £70 from £1,000 to £9,999.99 and £100 for £10,000 or more, for each late invoice. The late payment compensation entry explains how to claim it.
- Reasonable recovery costs. If recovering the debt costs you more than the fixed sum, for example because you pay an agency, you can claim reasonable costs on top.
A payment is late from the day after the agreed due date. If you agreed no date, it is late 30 days after the customer receives the invoice or you deliver the goods or service, whichever is later. Agreed payment terms between businesses should usually be 60 days or less, and longer terms must be fair to both sides.
Here is how the figures add up for a £4,800 invoice due on 30 September 2026 and paid 45 days late.
| Item | Calculation | Amount |
|---|---|---|
| Daily interest | £4,800 × 11.75% ÷ 365 | £1.55 |
| Interest for 45 days | £4,800 × 11.75% ÷ 365 × 45 | £69.53 |
| Fixed sum compensation | Debt between £1,000 and £9,999.99 | £70.00 |
| Total on top of the invoice | Interest plus compensation | £139.53 |
Making a court claim in England and Wales
If the letter before action does not work, you can claim online. Money Claim Online (MCOL) handles claims for a fixed amount under £100,000 with one claimant and no more than two defendants, and the defendant must have an address in England or Wales. HM Courts and Tribunals Service also runs a newer online money claims service for claims where you know the exact amount. Scotland and Northern Ireland have their own court procedures.
The court fee depends on the amount you claim, including interest. These are the fees GOV.UK listed in October 2026.
| Amount claimed | Court fee |
|---|---|
| Up to £300 | £35 |
| £300.01 to £500 | £50 |
| £500.01 to £1,000 | £70 |
| £1,000.01 to £1,500 | £80 |
| £1,500.01 to £3,000 | £115 |
| £3,000.01 to £5,000 | £205 |
| £5,000.01 to £10,000 | £455 |
| £10,000.01 to £200,000 | 5% of the claim |
| More than £200,000 | £10,000 |
Check the current figures on the GOV.UK court fees page before you claim. GOV.UK also suggests trying mediation, which can be quicker and cheaper than going to court.
How to keep the relationship while you chase
- Write to the person who pays. The buyer who placed the order rarely runs the payment run. Ask for an accounts payable contact when you open the account.
- Separate disputes from late payments. If the customer questions an invoice, pause the chase for that invoice, fix the problem or issue a credit note, then restart the timeline.
- Stay factual. State the invoice, the amount and the date. Guilt trips and threats you will not carry out make customers less likely to reply.
- Keep promises on record. A missed promise to pay is a reason to move to the next stage, not to start the timeline again.
- Agree installments in writing. If a customer cannot pay in full, a short written plan with dates works better than open-ended goodwill.
Consistency matters more than any single message
Chasing works when it happens on the same day for every invoice, including the ones that belong to friendly customers and the months when the team is busy with the year end. A written credit control policy sets the timeline, who calls which customers, when interest is added and who signs off a letter before action. Without it, the process depends on who happens to be in the office that week.
Sunbay is a platform for managing receivables that runs this timeline for every invoice. It pulls invoices and payments from your accounting system or ERP, sends reminders by email and text message before and after the due date, issues interest notes and payment demands, and creates a task for your team when a customer needs a call, disputes an amount or promises to pay. When a payment is booked, the next steps for that invoice stop. The repetitive steps run on their own, and your team handles the conversations and decisions. See how collections automation works in Sunbay.
FAQ
How do you chase a payment without damaging the relationship?
Stick to facts, write to the person who handles payments and ask for a payment date rather than making accusations. Send reminders on a fixed schedule so no customer feels singled out, and deal with disputes separately from late payments.
How long should I wait before chasing an unpaid invoice?
You do not need to wait at all. Send a friendly reminder about five days before the due date, another on the due date and the first chase a week after it. A phone call at around seven days overdue usually gets you a payment date or the reason for the delay.
Can I charge interest on a late payment in the UK?
Yes, if your customer is a business or a public authority. The Late Payment of Commercial Debts (Interest) Act 1998 lets you charge statutory interest of 8% a year over the Bank of England base rate, which is 11.75% for interest that starts to run in the second half of 2026, plus fixed compensation of £40, £70 or £100 per invoice.
What can I do if a client refuses to pay an invoice?
First find out why. If the client disputes the invoice, resolve the issue or issue a credit note. If there is no valid dispute, send a letter before action with a deadline, then make a court claim, instruct a solicitor or use a collection agency. In England and Wales you can claim online through Money Claim Online for fixed amounts under £100,000.
When is a payment late if we never agreed payment terms?
Between businesses, a payment with no agreed date becomes late 30 days after the customer receives the invoice or you deliver the goods or service, whichever is later. From that day you can charge statutory interest and fixed compensation.
How much does it cost to make a court claim for a debt?
The court fee depends on the amount you claim, including interest. In October 2026 GOV.UK listed £35 for claims up to £300, £455 for claims from £5,000.01 to £10,000 and 5% of the claim for amounts from £10,000.01 to £200,000.
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