14 October 2025 · 5 min read · Bruce Thomas
Late payment is usually treated as something that happens to a business. In our experience most of it is caused by the business itself — invoices raised late, terms never agreed, and nobody chasing until the money is badly needed.
Agree terms before the work starts
Put payment terms in writing at the quotation stage, including deposits and stage payments on larger jobs. A customer cannot dispute terms they accepted before you bought the materials.
Invoice immediately
An invoice raised three weeks after completion is paid three weeks later than it should be. Invoice on the day of completion, or on the agreed stage date, without exception.
A chasing routine
- Day 0: invoice issued with clear terms and payment details
- Day 7: a short courtesy email confirming it was received and approved for payment
- Day of due date: a polite reminder if unpaid
- Day +7: a telephone call, not an email
- Day +14: a formal letter referencing statutory interest
- Day +30: stop further work and escalate
Statutory interest
Businesses have a statutory right to claim interest and a fixed sum in compensation on commercial late payments. It is rarely worth pursuing for small amounts, but referencing the entitlement in a chasing letter is often effective in itself.
Know who you are dealing with
Run a credit check before extending significant credit, particularly in construction. Set an internal limit for each customer and stop work when it is exceeded, rather than hoping the position improves.
This article is general guidance for business owners in the UK and does not amount to advice for your particular circumstances. Tax rules change and the right answer depends on your figures — please take specific advice before acting.
