Late payers? Here’s how to get thi money in.Late payments: how to get paid faster.How to chase late payments, and your rights under UK law

Late payment is one of the biggest causes of cash flow problems for small businesses. The good news is that much of it can be prevented with a clear process, and the law gives you real rights when it can’t.

Prevention: set things up to get paid on time

• Agree terms before you start. Put them in writing, including what happens if an invoice is paid late.
• Check new customers. For large orders, a credit check or a deposit protects you.
• Invoice promptly and accurately. Use the right company name, purchase order number and contact. An invoice with a mistake is an easy excuse to delay.
• Make the due date obvious. Show the actual date, such as “Due 14 November”, rather than just “30 days”.
• Make paying easy, with bank details on every invoice and a payment link if you can.

A simple chasing routine

Consistency matters more than tone. A routine like this works for most businesses:

1. A few days before the due date: a friendly reminder email with the invoice attached.
2. The day after it’s due: a polite call to check the invoice has been approved and when it will be paid. Get a date.
3. Seven days overdue: a firmer email confirming what was agreed on the call.
4. Two to four weeks overdue: a formal letter mentioning your right to statutory interest and debt recovery costs.
5. Beyond that: consider pausing further work, sending a letter before action, or using a debt recovery service.

Keep notes of every conversation: who you spoke to, what they said and when. It saves time and helps if things escalate.

Your rights under UK law

Under the Late Payment of Commercial Debts (Interest) Act 1998, when another business pays you late you can usually claim:

• Statutory interest at 8% plus the Bank of England base rate, calculated daily on the overdue amount.
• Fixed debt recovery costs of £40 for debts up to £999.99, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can charge this once per payment.

If you haven’t agreed a payment date, a payment is usually late 30 days after the customer receives the invoice, or after you deliver the goods or service, whichever is later. Business customers usually have to pay within 60 days unless a longer term has been agreed and is fair to both sides, and public authorities within 30 days. If your contract sets its own interest rate for late payment, that rate applies instead.

These are the rules at the time of writing. A Commercial Payments Bill introduced to Parliament in 2026 proposes tighter limits on payment terms and stronger enforcement, so check the latest position on GOV.UK before relying on them.

Whether you actually charge interest is a commercial decision. Many businesses keep it as a backstop for persistent late payers rather than a first resort, and simply mentioning it is often enough.

The best time to agree what happens if an invoice is paid late is before you’ve done the work.

Plan for the customers who will pay late

Even with a good process, some customers will always pay late. Build that into your cash flow forecast using how they actually pay rather than their terms (here’s how to create one), so a slow payer is something you’ve planned for rather than a surprise. If late payments are squeezing your cash, a free cash health review is a good place to start.