3 February 2026 · 5 min read · Bruce Thomas
Cash-flow problems in small businesses are far more often a collection problem than a profit problem. The good news is that most of the fixes are administrative rather than confrontational.
Invoice immediately
Every day between finishing the work and issuing the invoice is a day added to the payment date, and it is the cheapest day to remove. Invoice on completion, or on the day of the milestone, not at the end of the month.
Make the invoice easy to pay
- State the due date as a date, not as 'thirty days'
- Put bank details and a payment reference on the face of the invoice
- Send it to the person who processes payments, not only your day-to-day contact
- Quote their purchase order number where they use one — missing PO numbers are a leading cause of silent delay
- Break long jobs into staged invoices rather than one large one at the end
Have a routine, not a reaction
A simple ladder works: a polite reminder a few days before the due date, a short chase the day after, a phone call at seven days, and a firm written notice at fourteen. Because it is a routine, nobody has to decide whether today is the day to chase.
Set terms before you start
Payment terms agreed at quotation stage are far easier to enforce than terms first mentioned on an invoice. For new customers, a deposit or staged payments is a reasonable request, not an insult.
You are also entitled to charge statutory interest and a fixed recovery cost on late commercial payments. Many businesses never mention it — knowing it exists changes the tone of a conversation.
Watch the number
Track average days to payment monthly. If it is rising, act before it becomes a funding conversation.
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.
