Recovering overdue business debts – the complete guide

We have been helping businesses recovery what is owing to them since we formed our business in 2002. During that time we have recovered tens of millions of pounds. Our internal expertise is back up by state of the art technology allowing immediate transfer of debt recovery instructions which also allow us to maximise claims for interest and compensation too.

We hope you find what you are looking for in this guide. And always remember – our specialist team is here to help. 

• Andy Wilks. Andy is one of the founders of FWJ and also built up its impressive debt recovery team. Andy is also responsible for the superb case management and recovery systems at FWJ which help automate debt recovery instructions and maximise claims. There are few people in the country who can match his debt recovery expertise.
• Kerrie Durban. Kerris is a Debt Recovery Manager with significant experience of county court claims and enforcement.
• Ayesha Addo is a paralegal with many years’ experience dealing with pre action claims, as well as county court and enforcement actions.
• Hardeep Singh is also a paralegal, with a lot of experience in the insolvency based recovery routes, such as statutory demands and winding up petitions.

Call any of our team today for help. As a business ourselves, we understand the importance of getting paid for the work you have done.

Contents

1. What is an overdue invoice and when is a payment considered late?
FAQs – Overdue Invoice Basics
2. Why do businesses struggle to get invoices paid on time?
FAQs – Causes & Impact of Late Payments
3. What steps should I take before chasing a late payment?
FAQs – Early-Stage Payment Chasing
4. How do I write a formal overdue invoice letter?
FAQs – Writing a Formal Payment Demand
5. When and how should I escalate the matter legally?
FAQs – Escalating Debt Recovery
6. What is the Pre-Action Protocol for Debt Claims and why does it matter?
FAQs – Understanding the Pre-Action Protocol
7. What are the legal options for recovering overdue invoices?
FAQs – Taking Formal Legal Action
8. How do I enforce a judgment once it’s been granted?
FAQs – Enforcing Judgments
9. What credit control measures can I implement?
FAQs – Preventing Overdue Invoices
10. General FAQs – Recovering Unpaid Invoices

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1. What is an overdue invoice and when is a payment considered late?

When you’ve delivered goods or services to a client and issued an invoice, you expect to be paid on time. But in reality, many businesses face delays — and knowing exactly when an invoice becomes “overdue” is crucial to deciding what action you can take.

What defines an “overdue invoice” under UK law?

An overdue invoice is one that has not been paid within the agreed payment terms — typically 30 days unless a different term was stated in writing between the supplier and the customer.

In the absence of a written contract, a default legal position under the Late Payment of Commercial Debts (Interest) Act 1998 is 30 days from the later of:

• The date the invoice was received, or
• The date goods or services were delivered

You can read more on this in the government’s guidance on late commercial payments.

At FWJ we have a team who specialise in the recovery of Late Payment Interest and Late Payment compensation under the Late Payment of Commercial Debts (Interest) Act 1998.

How long does a business have to pay an invoice in England?

Payment terms are usually agreed between the supplier and customer in writing (for example, 7, 14, 30, or even 60 days). However, if nothing is agreed in writing then this can become an issue, especially if the contract was agreed verbally and there is a difference of opinion about what the agreed payment terms were.

• Having said that, in England & Wales, the Late Payment of Commercial Debts (Interest) Act 1998  can help as it is states that in the absence of agreed payment terms, then for most situations, an invoice is  payable 30 days from the later of the date the invoice was received, the date goods or services were delivered.
• If a business fails to pay within that window, the invoice is considered legally overdue, and the creditor may be entitled to charge statutory interest and compensation.

What is the standard payment term for business-to-business transactions?

Most B2B transactions operate on 30-day payment terms, either from the invoice date or delivery of goods/services. However, some industries, particularly construction or wholesale, may use 60-day terms or longer.

Longer payment periods are lawful, but they must not be grossly unfair to the supplier — a concept that may be relevant under the 2013 EU Late Payment Directive, which has been retained in UK law post-Brexit.

Can you charge interest on late payments automatically?

Yes — this will be chargeable

• Under any agreed provisions in the contract between the parties
• If there are no agreed interest provisions, then under the Late Payment of Commercial Debts (Interest) Act 1998  at a rate of 8% above the Bank of England base rate. In addition to this, compensation can also be payable per invoice at either £40, £70 or £100 per overdue invoice depending on its value.

You can calculate what you’re owed using the government’s statutory interest calculator. But why not contact our team as we recover tens of thousands of pounds for clients in Late Payment Interest and Late Payment Compensation a year.

FAQs – Overdue Invoice Basics

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2. Why do businesses struggle to get invoices paid on time?

Late payment is a persistent issue across UK industries, particularly for SMEs. Even with strong client relationships, chasing unpaid invoices can be an uncomfortable — and costly — process. Understanding why invoices go unpaid is the first step to improving your credit control and reducing future risk.

What are the most common reasons for late or non-payment?

Several factors contribute to overdue invoices, including:

• Cash flow problems — Many clients delay payment simply because they’re struggling financially.
• Poor internal processes — Invoices get lost, go to the wrong department, or aren’t approved in time.
• Disputes over work quality or delivery — Clients may withhold payment if they believe the goods or services weren’t delivered as expected.
• Lack of urgency or discipline — Some clients prioritise other suppliers knowing that generally, small businesses are less likely to escalate the situation.
• Unclear payment terms — If your invoice or contract lacks clarity, clients may delay without technically breaching agreed terms.

Which industries suffer most from overdue invoices?

According to a UK Government research report on late payments, the industries hit hardest include:

• Construction
• Wholesale and retail
• Manufacturing
• Professional services (e.g., consultants, IT providers)
• Logistics and transport

Small businesses in these sectors are often subcontractors or suppliers to larger organisations — who frequently stretch payment terms or delay settling invoices.

What impact do overdue invoices have on SME cash flow?

Late payments can have a serious ripple effect. Recent research from the Federation of Small Businesses (FSB) shows that:

• Around 50,000 small businesses close each year due to cash flow problems caused by late payments
• The average small firm is owed over £22,000 in overdue invoices
• Late payments cost the UK economy approximately £2.5 billion annually

Additional statistics reinforce the problem:

• A Direct Line Business Insurance study found that 23.4 billion pounds is tied up in unpaid invoices at any given time in the UK
• IFA Magazine reports that small businesses suffer from £7.4 billion in unpaid invoices
• A 2023 NatWest survey revealed that two million UK SMEs fall victim to persistent late payment

This financial pressure can lead to:

• Missed payroll or supplier payments
• Inability to reinvest or grow the business
• Reliance on credit to cover operational costs
• Greater anxiety for business owners and directors

Are late payments getting worse in the UK?

Yes — the issue is not improving. According to the same NatWest survey, the average overdue payment is now settled 73 days late, the highest post-pandemic figure recorded.

Despite regulatory efforts — such as the Prompt Payment Code and proposed enforcement powers for the Small Business Commissioner — many SMEs still struggle to get paid on time.

The Fair Payment Code has since replaced the Prompt Payment Code. It is more aspirational by supporting businesses which wish to improve payment practices and helping them move up from Bronze to Silver, and to Gold over time.  

FAQs – Causes & Impact of Late Payments

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3. What steps should I take before chasing a late payment?

Before launching into legal action, it’s important to exhaust all reasonable efforts to recover the debt through informal means. This not only protects your business relationships but also strengthens your legal position if the matter escalates.

Should you send a polite reminder first?

Yes — always start with a friendly but firm reminder. Mistakes happen: an invoice might have been missed, misfiled, or delayed unintentionally. A courteous reminder email or call can often result in prompt payment without further action.

This reminder should:

• Reference the original invoice number and date
• State the amount due and the payment method
• Politely note that the payment is overdue
• Request immediate settlement or a response

Here’s a simple format:

Subject: Friendly Reminder – Invoice #1234 Now Overdue
Dear [Client],
I hope this finds you well. I’m just writing to remind you that invoice #1234, dated [date], for £[amount] is now overdue. We’d appreciate settlement at your earliest convenience.
Please let us know if there are any issues or if you require a copy of the invoice.

Ideally you would build this into your accounting software so that letters / e mails such as this are automatically sent out as part of your “dunning cycle” process. Automation can make a huge difference to getting overdue debts paid in a timely manner.

How many reminders should you send before escalating?

While there’s no legal requirement, our experience shows that a three-step reminder process is best practice:

1. Polite reminder – just after the due date
2. Firm reminder – a week or so later, noting consequences of non-payment
3. Final warning – before escalation, stating intent to instruct solicitors or pursue legal recovery

Spacing these a few days apart keeps the pressure up while giving the debtor reasonable time to respond.

What should be included in a payment reminder?

Your reminder should be clear, concise, and professional. Always include:

• Invoice reference number(s)
• Date(s) of issue and due date(s)
• Total outstanding amount
• Payment method and deadline
• Contact details for follow-up
• Any applicable late payment interest or charges (if appropriate)

Most of this information can be contained in a simple statement of account which all accounts packages can produce.

For later reminders, it may be worth noting your right to claim interest, either under the agreed contractual terms or alternatively under the Late Payment of Commercial Debts Act. If you are going under the Act, you can also make claims for Late Payment Compensation too.

Whilst these can be quite time consuming to calculate – our superb systems can do this in seconds – and it can add hundreds, if not, thousands of pounds to some debt recovery claims.

When should a formal invoice reminder letter be sent?

If emails and calls have failed to prompt payment, a written letter sent by post or email with read receipt may be your next step. A formal reminder letter should clearly outline:

• The amount owed and the invoice(s) it relates to
• That the invoice is overdue despite previous reminders
• A final deadline for payment (usually 7–14 days)
• A clear warning that legal action may follow

This also lays the groundwork for a Letter Before Action, should you later choose to pursue the matter legally.

FAQs – Early-Stage Payment Chasing

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4. How do I write a formal overdue invoice letter?

When friendly reminders fail to prompt payment, the next step is to send a formal overdue invoice letter. This is a clear, written demand for payment that signals to the debtor that you’re serious — and that legal action may follow if payment isn’t received.

A well-drafted letter is professional, legally aware, and firm without being aggressive. It also helps build a paper trail in case the matter escalates. At Francis Wilks & Jones we can help you with your pre legal letters and help you build a suite of great pre legal letters.

What should an overdue invoice letter include?

Your formal overdue invoice letter should contain the following key elements:

• A clear subject line (e.g., “Final Demand for Payment – Invoice #1234”)
• Your business’s name and contact details
• The client’s name and address
• The original invoice number, amount, and due date
• A summary of any previous reminders sent
• A new final deadline for payment (typically 7–14 days)
• A brief statement of your legal rights (e.g., to charge interest)
• A warning that legal action may follow if payment is not received

Tip: This letter should be professional and factual. Avoid emotional language or threats — focus on the facts and what will happen next.

Should the tone be firm or friendly?

By this stage, the tone should shift from polite to firm and formal — without being hostile. You’re no longer making a casual request; you’re asserting a legal entitlement to payment. Make it clear that this is the final step before legal recovery begins.

Here’s a tone example:

“Despite previous reminders, we have yet to receive payment for Invoice #1234, which was due on [date]. We now require payment of £[amount] within 7 days from the date of this letter. If payment is not made by this date, we reserve the right to initiate legal proceedings without further notice.”

Is it worth mentioning legal action in the letter?

Yes — and it’s often advisable. A strong overdue invoice letter should mention that you may:

• Instruct solicitors
• Issue a claim in the County Court
• Add statutory interest and compensation
• Seek costs where appropriate

Referencing legal consequences helps underline the seriousness of non-payment — and in many cases, it results in prompt settlement.

Many businesses worry about going formal with their demands.  But ultimately, you have supplied the goods / services and should be paid, no matter how big the customer is. Otherwise you have done all that work for free!

Are there any templates businesses can use?

Yes. You can find basic templates online, but these should be tailored to your situation — especially if the client has disputed the invoice or part-payment has already been made.

If you need help drafting a tailored demand letter that complies with relevant pre-action protocols and legal standards, our experienced team at Francis Wilks & Jones can help ensure the letter has the maximum legal impact.

We often do this for clients, reviewing their existing pre legal letters and helping them put in place procedures to help collect their debts without the need to instruct us at all.

FAQs – Writing a Formal Payment Demand

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5. When and how should I escalate the matter legally?

If reminders and a formal overdue invoice letter haven’t prompted payment, it may be time to escalate. Legal action is never the first choice, but when a client continues to ignore your communications, it becomes a necessary next step — and one you’re fully entitled to pursue under English law.

Taking the correct legal approach helps protect your rights, improve your chances of success, and recover the money you’re owed — often with interest and costs.

What are the legal options for recovering overdue invoices?

Your main options include:

• Letter Before Action (LBA) – A formal solicitor’s letter stating that court proceedings will begin if payment isn’t received by a set deadline.
• Statutory Demand – A legal notice requiring payment within 21 days, often used where the debt is undisputed and exceeds £750 (for companies).
• County Court Money Claim – A formal court claim issued online or by post, typically through the small claims process for debts under £10,000.
• Winding-Up Petition – For larger debts against companies, this is a powerful but more complex option (usually where the debt exceeds £750 and is undisputed).

Each route has pros and cons, and selecting the right option depends on factors like the amount owed, whether the debt is disputed, and the financial position of the debtor.

Our specialist debt recovery team at FWJ can talk you through the processes and find the right option for you. Our tailored service results in millions of pounds recovered for our clients each year.

When is it appropriate to involve a solicitor?

Involving a solicitor early can be cost-effective — particularly when:

• The debtor has ignored your communications
• The debt is large or commercially significant
• The relationship has broken down
• There are legal or procedural complexities
• You want to apply pressure by showing you’re serious

At Francis Wilks & Jones, we regularly help businesses of all sizes recover overdue invoices using clear, proportionate legal action. We’ll help you choose the best route and avoid common pitfalls.

What is a Letter Before Action and should I send one?

A Letter Before Action (LBA) solicitor-drafted letter that:

• Sets out the amount owed and the legal basis for recovery
• Provides a deadline for payment (typically 7–14 days)
• States that court action will follow if payment is not received

An LBA often carries more weight than a business’s own letter and can be sufficient to trigger payment without needing to go to court. We’ll explore it more fully in a separate guide.

In most debt recovery cases, an Letter Before Action is required under the Pre-Action Protocol for Debt Claims, which we’ll cover in Section 6.

What is a Statutory Demand and when is it used?

A Statutory Demand is a formal notice served on a company (or individual) demanding payment of a debt. It’s used when:

• The debt is undisputed
• The debtor is refusing to engage
• You want to pressure them by threatening insolvency proceedings

If no payment or response is received within 21 days, the creditor may issue a Winding-Up Petition (against a company) or Bankruptcy Petition (against an individual). This is a serious step — and one the courts treat with caution — but it can be highly effective.

Our team are specialists in both statutory demands and winding up petitions.

FAQs – Escalating Debt Recovery

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6. What is the Pre-Action Protocol for Debt Claims and why does it matter?

Before taking legal action to recover a debt, especially against an individual or sole trader, creditors are expected to follow the Pre-Action Protocol for Debt Claims. This protocol, introduced by the Ministry of Justice, is a formal set of rules designed to:

• Encourage early communication between the parties
• Avoid unnecessary court proceedings
• Help parties resolve disputes without litigation
• Reduce costs and delay

Non-compliance with the protocol can have serious consequences — including costs penalties or the court putting your claim on hold.

However, there are instances where you do not have to follow the Protocol and we can help advise you on these.  We have found that “professional” debtors use it to slow down payment of valid debts. We can stop this happening.

Who does the Pre-Action Protocol apply to?

The protocol applies when a business (including sole traders, partnerships, and companies) is seeking payment of a debt from an individual — including sole traders.

It does not apply to:

• Business-to-business debts where both parties are companies or partnerships
• Claims already governed by another protocol (e.g. construction disputes)

That said, even in B2B cases, it is still considered best practice to follow the spirit of the protocol by providing clear notice and documents before issuing a claim.

What documents must be included in the Letter of Claim?

If you’re proceeding under the protocol (or want to follow best practice), your Letter of Claim must include:

1. The amount of the debt, interest, and any additional charges
2. A copy of the original invoice(s)
3. A full breakdown of the amount owed
4. A copy of the contract or agreement (if one exists)
5. A copy of the Information Sheet, Reply Form, and Financial Statement Form (provided in the protocol)

These forms are available from the Ministry of Justice website. But we can help set all this out in a LBA if required.

The debtor must be given at least 30 days to respond before legal proceedings can begin and in more complex circumstances up to 90 days.

What is the required response time under the protocol?

Once the Letter of Claim has been served, the debtor has a minimum of 30 days to reply. They may:

• Agree to pay
• Request further information
• Dispute the debt
• Propose a repayment plan (often via the Financial Statement)

If the debtor replies, you are expected to allow reasonable time for resolution or clarification before issuing court proceedings.

What are the risks of failing to follow the protocol?

If you go straight to court without complying (or showing an attempt to comply), the court may:

• Suspend the claim until the protocol steps are followed
• Reduce or deny recovery of legal costs
• Award costs against you, even if you win
• Take a negative view of your conduct

Instructing solicitors like Francis Wilks & Jones ensures compliance with the protocol and positions your case strongly from the outset.

FAQs – Understanding the Pre-Action Protocol

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7. What are the legal options for recovering overdue invoices?

Your main options include:

• Letter Before Action (LBA) – A solicitor’s letter warning of court proceedings if payment isn’t received
• County Court Money Claim – A formal court claim, often pursued via the small claims court for debts under £10,000 and in the Fast Track or Intermediate Track for claims up to £100,000. We have all the links to the court for same day issuing.
• Statutory Demand – A formal demand under insolvency law, triggering possible bankruptcy or winding-up proceedings in the event of continued non payment.
• Winding-Up Petition – Used for companies, forcing liquidation if the debt remains unpaid.
• Bankruptcy Petition – Used against individuals where debts exceed £5,000

Each route has pros and cons depending on the amount owed, the nature of the debtor, and whether the debt is contested. Our team at FWJ will guide you through the various options available to you. It is vital legal advice is taken at this stage as picking the wrong recovery route can backfire and become very costly indeed. But get it right and you can get your deb paid quickly.

How does the County Court Money Claim process work?

The County Court Money Claim (also known as the “small claims court” for lower-value cases) is the most common route for recovering unpaid invoices.

Steps typically include:

1. Issuing a claim – online via Money Claim Online or using paper forms
2. Service of the claim – the debtor must respond within 14 days acknowledging the claim to avoid judgment or if it acknowledges within 14 days, then it must file a defence within the next 14 days to avoid judgment (CCJ)
3. Disputed claims – if the debtor contests the claim and the case goes all the way to a trial, this can take up to 12 months

If you succeed, you may be awarded:

• The outstanding debt
• Interest under the Late Payment legislation
• Court fees
• Legal costs (but not in small claims cases)

County court claims are appropriate in some case, but we prefer if we can to use statutory demands and other insolvency based recovery tools as these are often quicker and more hard hitting.

Can I use a Statutory Demand to recover an unpaid invoice?

Yes — a Statutory Demand is a powerful legal document used to demand payment of a debt within 21 days. If the debtor fails to pay, you may be entitled to start insolvency proceedings.

It’s typically used where:

• The debt is undisputed
• The amount owed is £750 or more
• Prior reminders and letters have been ignored

A Statutory Demand often prompts swift payment — debtors are keen to avoid the serious consequences of winding-up or bankruptcy.

Warning: If the debt is disputed, issuing a Statutory Demand may backfire. The debtor can apply to set it aside if it is an individual or apply to court for an injunction if it is a company –  and you could face a significant costs order. Legal advice is very important to avoid unforeseen mistakes

What does a Statutory Demand need to include?

It must be served in the prescribed legal format and contain:

• Full details of the amount owed
• Explanation of the debt (e.g. unpaid invoice)
• Statement of intent to begin insolvency proceedings if not paid
• A clear 21-day deadline for settlement or dispute

Service should be by personal delivery or via a professional process server. Errors in format or service can invalidate the demand — our team at Francis Wilks & Jones can handle this process for you to ensure they are fully compliant.

What happens if the debtor doesn’t respond?

If no action is taken within 21 days, you may escalate to:

• A Winding-Up Petition (for companies)
• A Bankruptcy Petition (for individuals)

These are serious legal proceedings that can lead to the business or individual being declared insolvent. They’re also complex, so legal advice is essential before issuing a petition.

When should I consider issuing a winding-up petition?

A Winding-Up Petition can be high risk, but effective in the right circumstances. It is usually suitable where:

• The debtor is a limited company
• The debt is undisputed
• The amount exceeds £750
• Previous efforts (including a Statutory Demand) have failed

Once filed, the petition can be advertised in the London Gazette. This public notice often puts extreme pressure on the company, as it can damage credit ratings and banking relationships. It is the threat of this happening which often leads to payment.

However, it’s not appropriate for:

• Disputed debts
• Very small amounts
• The Debtor has a valid cross claim
• Situations where the debtor is likely to settle informally

Due to the serious consequences, you should always seek advice before proceeding.

What if the debtor is overseas or hard to trace?

Cross-border debt recovery is more complex, but not impossible. Depending on the location and legal jurisdiction of the debtor, your options include:

• Using a tracing agent to locate the debtor
• Serving documents in compliance with international law (e.g. Hague Convention)
• Instructing local solicitors abroad
• Enforcing UK court judgments in foreign courts (via recognition procedures)

Francis Wilks & Jones has extensive experience in international debt recovery and can advise you on jurisdiction, enforcement, and likely recovery outcomes.

Can mediation or settlement still be an option?

Yes. Even after legal action is underway, you can still:

• Propose a settlement agreement
• Accept a repayment plan
• Engage in Alternative Dispute Resolution (ADR) or mediation

Courts encourage this approach, and parties who unreasonably refuse ADR may be penalised in costs. It also allows for faster, more flexible outcomes — especially where business relationships may be salvageable.

FAQs – Taking Formal Legal Action

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8. How do I enforce a judgment once it’s been granted?

Obtaining a County Court Judgment (CCJ) is an important milestone — but it doesn’t guarantee payment. If the debtor still refuses to pay after judgment is entered, you have several legal options available to enforce the judgement .

Enforcement mechanisms in England and Wales are well-established and can be highly effective if used strategically. The right method depends on factors like the debtor’s assets, business structure, and responsiveness.

Read about all your enforcement options in our fantastic Enforcing a Judgment – 2025 Guide

What is a County Court Judgment (CCJ)?

A CCJ is a formal court order that confirms the debtor owes you money. It may be granted:

• By default (if the debtor fails to respond)
• By admission (if the debtor accepts the claim)
• After a hearing (if the matter is defended and the court rules in your favour)

Once a CCJ is issued, the debtor is legally obliged to pay — either in full or in agreed instalments.

If the debtor fails to comply with the judgment voluntarily, you can choose from a number of enforcement options.

What enforcement methods are available after a CCJ?

You can apply for one or more of the following enforcement routes, depending on your circumstances. Our detailed Enforcement Guide sets this all out, but in summary

1. Writ of Control (High Court Enforcement Officers)

This is often the most effective method, especially for debts over £600. The judgment is transferred to the High Court, and certified High Court Enforcement Officers (HCEOs) are instructed to recover the debt.

They can:

• Visit the debtor’s premises
• Seize and sell goods to cover the debt
• Negotiate payment on the spot

HCEOs are usually more successful than County Court bailiffs due to stricter enforcement powers and quicker action.

2. Charging Order

A Charging Order secures the debt against the debtor’s property, such as land or real estate. While it doesn’t result in immediate payment, it can:

• Prevent the sale or refinance of the property without your debt being cleared
• Be followed by an Order for Sale, forcing the sale of the asset (in some cases)

This method is particularly useful where the debtor has significant assets but is refusing to pay.

3. Third Party Debt Order

If you know the debtor is owed money by someone else — or has funds in a bank account — you can apply for a Third Party Debt Order. This freezes the funds and, if successful, redirects them to you.

Example uses include:

• Freezing a business bank account
• Seizing funds owed to the debtor by one of their clients

You’ll need clear information about where the funds are held to make this worthwhile.

4. Attachment of Earnings Order

If the debtor is an individual in employment, you can apply to have money deducted directly from their wages. This is less useful for businesses or self-employed debtors, but it can be a steady recovery method in the right context.

When should you instruct enforcement agents?

As soon as a judgment remains unpaid beyond the deadline (usually 14 days), you can begin enforcement. Swift action is often key — the longer you wait, the greater the risk that the debtor becomes insolvent, moves assets, or simply disappears.

At Francis Wilks & Jones, we routinely act for businesses in enforcing unpaid judgments and can advise you on the most effective strategy based on the debtor’s financial profile.

FAQs – Enforcing Judgments

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9. What credit control measures can I implement?

An effective credit control process is key to getting paid on time. Consider implementing the following:

• Set clear payment terms in all contracts and quotes (e.g. “payment due within 30 days”)
• Issue invoices promptly — ideally as soon as the work is completed or goods delivered
• Follow up early — send automated reminders before and after the due date
• Keep accurate records of what’s been invoiced, paid, or chased
• Maintain communication — keep in touch with clients about outstanding amounts

Outsourcing or hiring a dedicated credit controller can also improve consistency and results.

Should I perform credit checks before taking on clients?

Yes — particularly for larger contracts or repeat work. Basic credit checks can reveal whether a company:

• Has a poor or declining credit score
• Has unpaid CCJs or a winding-up petition
• Has directors with a history of failed businesses

There are a range of services such as Creditsafe and Experian which offer quick access to this information. A basic check can end up saving thousands of pounds of bad debt later on.

Don’t be afraid to ask for trade references, or to insist on payment upfront for higher-risk customers.

Can upfront payment or staged billing help?

If you can agree this with the customer – then absolutely. Where practical, structure your billing to reduce risk:

• 50/50 split (e.g. 50% upfront, 50% on delivery)
• Milestone billing (e.g. at key project stages)
• Retention clauses (where final payment is held back until sign-off)

This improves your cash flow and minimises exposure if a client delays or defaults.

What clauses should I include in contracts?

Your terms and conditions should be watertight. Key clauses include:

• Payment terms (clearly stating due dates)
• Interest on late payments (e.g. statutory interest under the Late Payment of Commercial Debts Act)
• Recovery costs – your right to claim fixed fees and any legal costs
• Jurisdiction – confirming that disputes will be governed by English law
• Retention of title (for goods supplied) – so you retain ownership until paid
• No set off clause – to help obtain payment upfront even if the customer has a counter claims.

Our firm can help ensure your contract templates are enforceable and suitable for your business type.

FAQs – Preventing Overdue Invoices

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10. General FAQs – Recovering Unpaid Invoices

For more immediate help – call one of our enforcement experts today. Please contact Kerrie Durban, Andy Wilks, Hardeep Singh or Ayesha Addo for assistance and we can help you with our claim. We look forward to speaking to you.

Extremely thorough, professional and speedy, and the fees were much more reasonable than the competition. Highly recommended.

A private client we assisted with issuing a winding-up petition to recover debts