How to chase an overdue invoice (the right way)

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You’ve delivered on your work, set your payment terms and sent an invoice to your client. But the payment is overdue, and you haven’t received a response or update.

Don’t worry—you’re not alone. We surveyed 1,000 CEOs, founders, directors and senior management staff at SMEs and found that the average UK SME is chasing five outstanding invoices at any one time. That amounts to an average of £8,500 being owed and 1.5 hours per day 😲.

But no need to panic just yet! There are several ways to manage an overdue invoice, no matter what state your client relationship is in.

In this quick guide, we’ll cover how to get your invoices paid without burning client relationships, and make sure you get paid fast.

Top Tip: Before we dive in, it’s important to understand the basics of creating an invoice in a way that incentivises prompt payments, as well as what common mistakes to avoid. To learn more, read our guide to raising an invoice and getting paid 💯

Table of contents

Setting expectations & charging interest

The best way to get paid for an overdue invoice is to set expectations from the beginning of your relationship with a client.

Start by outlining your payment terms from the first proposal you send to a client. By the time both parties are ready to sign a contract, there should be no surprises. Then, review these conditions during your kick-off calls and onboarding process.

When setting these expectations, make sure you cover the following:

  1. How you send your invoices
  2. How your client can pay you
  3. When you send invoices (i.e. day of the month)
  4. Payment terms (i.e. NET 15 for 15 days)

Make sure to have your “accounting house” in order, too. If you’re constantly creating invoices manually and sending them via email every time, it can be hard to keep track. Instead, use a smart business account with integrated invoicing (such as Tide invoicing 😉).

Top Tip: To see a list of the key features that an invoicing software solution should include, as well as our picks for the best invoicing software solutions available on the market today, read our guide to the 11 best invoicing software solutions for your small business 🔥

You can also deter against late payments by including interest terms in your agreement. The law allows you to do this, thanks to the Late Payment of Commercial Debts (Interest) Act 1998.

This legislation allows you to claim up to 8% interest on unpaid invoices. Just make sure you make this absolutely clear to your client when beginning your relationship.

Finally, make sure the information you include on your invoice is correct. Incorrect information can cause delays or disputes, so always ensure amounts, dates and client details are accurate before sending.

What to do when you’ve not been paid

You’ve sent your invoice, and the client has missed the due date. The first important step is to keep calm. Sometimes, things slip through the cracks and people forget. A friendly reminder might be all that’s needed.

Make sure that first reminder is friendly. Remember, you don’t want to burn client relationships with harsh language. We’ll give you a template for this in the next section.

Don’t be too eager to follow up, either. If your payment terms are 30 days after receipt of invoice, don’t chase up on day 30. Wait a few days and then send that first reminder.

When reaching out, make sure you’re speaking to the right person. If the company you’re working with has an accounts department, ask your contact if it would be appropriate to reach out to them directly. Remember to include a copy of your invoice in each email.

If email doesn’t work, it may be worth resorting to a phone call. Pick up the phone and find out if your client received your previous emails. Ask them the following questions:

  • Did you receive my last email about the overdue invoice? (quote the invoice reference if necessary)
  • Do you have any issues with the invoice that we can address while I’m on the phone?
  • When do you think you can make the payment?

Always make a record of your correspondence (both email and over the phone). Include who you talked to, the date and time. This will be invaluable if you have to escalate things further. At some point, you may even have to hit “pause” on services rendered until the invoice is paid.

Email templates

Knowing how to communicate without burning your client relationships can be a delicate balance. Here, we share some templates you can use when reaching out and chasing late payments.

1. Less than two weeks overdue

Subject: Overdue payment ([YOUR COMPANY]) – [INVOICE REFERENCE]


I’m following up on invoice no. [INVOICE REFERENCE]. It was due for payment on [INVOICE DUE DATE] and I wanted to confirm you received it?

I’ve attached the invoice to this email again for reference. Could you please confirm the invoice has been scheduled for payment?

Many thanks,


2. More than two weeks overdue

Subject: Overdue payment ([YOUR COMPANY]) – [INVOICE REFERENCE]


Further to my previous email, I’m reaching out regarding outstanding invoice [INVOICE REFERENCE] / [INVOICE BALANCE].

As the invoice is overdue, could you please give an update on payment status. If there are any issues, such as information missing, please let me know and I’ll send over an amended invoice.

I’ve attached the invoice to this email for reference.



3. Interest warning (30 days or more)

Subject: Overdue payment ([YOUR COMPANY]) – [INVOICE REFERENCE]


Further to my previous email, I’m contacting you again on behalf of [YOUR COMPANY] with regard to outstanding invoice [INVOICE REFERENCE] / [INVOICE BALANCE].

To remind you, as per our service agreement, we are entitled to charge X% interest per [DAY/WEEK] of invoice going unpaid. I’d love to avoid this, so if there are any issues please let me know. I’ve attached the invoice to this email again for convenience.



4. Final reminders (Extremely late invoices)

Subject: Final reminder ([YOUR COMPANY]) – Invoice [INVOICE REFERENCE]


Further to my previous email, I’m contacting you on behalf of [YOUR COMPANY] regarding invoice [INVOICE REFERENCE] / [INVOICE AMOUNT].

This invoice was due for payment on [DUE DATE] and remains unpaid.

As we’ve not heard from you, I’m afraid we will shortly begin legal proceedings in order to receive the amount owed to [YOUR COMPANY].

Immediate payment will result in us closing this issue without need for legal action. I’ve attached the invoice to this email for convenience.



The thought of seeking legal advice can seem overwhelming, and perhaps a little unnecessary. However, when it comes to monies owed and the cash flow health of your business, it’s simply a part of business.

Here, we’ll cover three approaches you can choose depending on your situation. However, this is to be used as a point of reference only. We highly advise you seek legal counsel from a professional solicitor before taking action.


At the first stage of the approach, it’s best to get into a room to discuss the issue and look for the best way to fix it. This mediation process allows the client to discuss any miscommunication issues, or address any internal problems that may have caused escalation head-on.

It’s also a much cheaper cost than legal proceedings. You can learn more about mediation over on the Civil Mediation Council’s website.

Statutory demand

This is a formal, legal letter sent to the client, which they have 21 days to respond to. If the letter is ignored, you can take them to court.

Ignoring a statutory demand has serious risks as it increases a company’s chance of being liquidated. If you do find you are being ignored, you can attempt to wind up a company if their debts owed are over £750. In a more serious effort, you can attempt to make them bankrupt if they have debts owed over £5,000. In both cases, you must be able to prove the company cannot pay their debt to you.

If you do file a wind up petition and a company ignores you, it will be listed in the Gazette and risks having its bank accounts closed and lines of credit denied.

As found on the GOV.UK website, you can send the statutory demand letter yourself, but you must be aware of all the (very strict) criteria required to make it upheld. Again, we highly recommend seeking legal advice before following this route yourself.

Court action

If the invoice hasn’t been disputed throughout the entirety of the process (including your email follow-ups), then you can take court action.

For claims under £100,000, follow the process online as outlined by the Justice Department. When going this route, you must be able to prove sufficient communication between you and the client.

If the client disputes your claim, then you may be required to attend court. Make sure you check out the Money Claim Online (MCOL) guide from HM Courts & Tribunal Service to make sure you’ve collected and provided all the correct information.

To begin this process, follow the process on Money Claim Online. Once again, make sure you seek legal advice before taking any action.

Worried about not being paid? Get guaranteed payment with Invoice Protection
Protect your cash flow and peace of mind, by insuring your invoices. With Invoice Protection, your payment is guaranteed – even if your customer can’t pay you (T&Cs apply). It’s easy to set up, there’s no long-term commitment, and you only pay per invoice. Try out Invoice Protection with a Tide account.

Ways to reduce invoice follow-up stress

As we’ve just seen, chasing unpaid invoices can be quite stressful and lead you down serious legal avenues.

One way to reduce run-down stress is by automating the email follow up process. Through your invoicing software, set up automatic email sends every X days and let the system take care of the communication for you.

Alternatively, you can outsource the follow-up process to an invoice processing service. Rather than risking valuable time getting frustrated by unresponsive clients, let a professional service take the burden from you.

And through Tide Invoicing, you can set up and personalise reminders to send to customers regarding outstanding invoices. Simply turn on the invoice chaser, choose a date for the follow up and hit send. Once the invoice does get paid, Tide will automatically match your incoming payment to your outstanding invoice and mark the invoice as paid for you 🎊

Further, you can protect your invoices against the risk of non-payment by insuring your invoices with Tide. This way, even if your customer can’t or won’t pay you for whatever reason, your payment is still guaranteed. Open a free business bank account and get started today.

In all of these scenarios, you get to spend less time worrying about getting paid, and more time adding value to your business.

💡 Expert insights

Darren Fell is the CEO and Founder of Crunch, an award-winning online accounting service that supports freelancers, contractors, and practically anyone who’s self-employed. 

For over ten years, Crunch has combined easy-to-use, online accounting software with actual human beings, so that you’re always able to access your accounts and seek the support you need. 

Crunch helps thousands of clients with their accounting needs every single year, using their years of expertise and insight to help small business owners manage their responsibilities.

Q1: What advice would you give to small business owners when setting payment expectations with clients? 

Late payments can be the difference between keeping the lights on or closing altogether for some businesses, which is why you should always agree a written contract with your client concerning the service being carried out or product delivered, clearly outlining payment expectations before you begin any work for them. Make sure you both agree what work is to be performed, what date it should be completed by, and when and how you expect to be paid.

Once the work is complete, or if you’ve agreed staged payments, make sure you’re being proactive. Issue a clear and accurate invoice which breaks down your services and explains how you’ve reached your overall fee. We recommend you start using some free accounting software to make this as simple as possible, and even lets you set up automated payment reminders to help make things even more efficient.

Make sure you know exactly who you need to go to with your invoice, too – many’s the time businesses have been left chasing payments simply because they’ve sent their invoice to the wrong department!

Q2: What’s the best approach for chasing overdue invoices, without burning relationships?

If you find yourself having to chase an unpaid invoice, establish a procedure: perhaps you issue a polite automated reminder at first, which then develops into a more formal phone call, before advancing to some of the tougher measures available to you, such as charging your client statutory interest, or calling in debt collectors if the issue really begins to drag on. This is the nuclear option, though: don’t dive for the debt collectors at the first sign of trouble, or you’ll start to develop something of a reputation!

Of course, an ounce of prevention is worth a pound of cure, so don’t forget to outline what steps you’ll take to chase your payment should your client miss their deadline before you begin the work for them. Clearly explain the steps they can expect you to take if they don’t pay you on time, and that these actions are your standard practice, nothing personal!

Wrapping up

Getting paid on time and chasing overdue invoices will be much easier by setting expectations in advance. Make your payment terms and invoicing process clear during your onboarding process.

When first following up on invoices, wait a few days before reaching out. Remember, things can slip through the cracks, so a friendly reminder is usually all it takes. If you need to remind them further, use the email templates provided or set up automated invoice chasing through Tide.

And while legal action is sometimes needed, it’s unlikely you’ll need to go down this route.

Photo by Bruce Mars, published on Pexels

Rupa Gohil

Partnerships Manager and small business accounting advocate

Tide Team

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