1
Provided the debt is still within the time limit for recovery. That limit is usually several years, but check before you wait.
Unpaid invoices are the most common dispute small businesses bring us. Most are resolved quickly, and the steps are the same for almost all of them.
These are the questions business owners ask most often when a customer stops paying.
How long should I wait before chasing?
Not long. Send a reminder as soon as the due date passes. Most late payments are oversights, and a prompt, friendly reminder fixes them. The longer you wait, the more the customer assumes the due date doesn’t matter.
What is the usual sequence?
A polite reminder, with a copy of the invoice and the due date.
A firmer reminder giving a final date to pay.
A phone call, followed by an email confirming what was said.
A letter of demand, setting out the amount, the basis for it and what happens next.
If needed, a claim in the right court or tribunal for the amount.
What should a reminder say?
Keep it short and specific: the invoice number, the amount, the original due date and a new date to pay by. Attach the invoice. Stay polite even if you are frustrated; if the matter goes further, your messages may be read by a court or tribunal.
Why keep a record?
A dated record of every reminder, call and reply shows that you gave the customer every chance to pay. It also helps if the customer later disputes the amount or says they never received the invoice. Keep copies of quotes, agreements, delivery notes and any messages approving the work.
When should I send a letter of demand?
When reminders haven’t worked, usually a few weeks after the due date. A letter of demand is a formal step: it states the amount owed, why it is owed, the date by which it must be paid and what you will do if it isn’t. A letter on a lawyer’s letterhead often prompts payment because it shows you are serious.
Can I charge interest or my recovery costs?
Only if your terms allow it, or the law where you are does. Check your quotes, invoices and any agreement with the customer. If your terms don’t mention interest or collection costs, consider adding them for future work.
What if the customer says the work wasn’t right?
Take the complaint seriously and ask for the details in writing. If part of the work genuinely fell short, offering to fix it or reduce the invoice can be the fastest way to be paid the rest. If the complaint only appears after you ask for payment, your records of approvals and delivery become important.
Is court worth it?
For larger amounts, often yes. Many places have simpler, cheaper processes for small claims, sometimes through a tribunal, where you can represent yourself. Before you file, consider whether the customer can actually pay; a judgment against a business with no money is hard to collect.
How long do I have?
There is a time limit for recovering a debt. It is usually several years from the date the money became due, but it varies by place and by type of claim. Don’t let an old invoice sit too long before you act.
How do I stop this happening again?
Clear payment terms in your quotes and invoices.
Deposits or progress payments for larger jobs.
A written agreement for ongoing customers.
Credit checks or references for new accounts.
Invoicing promptly, and following up the day a payment is late.
We can review your terms for a fixed fee, and prepare a letter of demand you can reuse.
Your situation isn’t a short answer?
Rory Fitzgerald
A first meeting ends with a written plan and a fixed quote.