How to deal with late payments

Being your own boss is a win. Chasing unpaid invoices? Not so much.

Chances are you’ve experienced this. It’s frustrating, worrying and always leaves a bitter taste. 

So what exactly can you do if a client isn’t paying up? Can you slap on interest? Take them to court? Or is a polite chaser all that’s needed? 

Fear not - we show you how to get paid on time and keep client relationships sweet, not sour.

1. Get off on the right foot and set clear payment terms 

The best way to tackle late payments is to stop them happening in the first place. 

Make sure your payment terms are crystal clear from the start. Put them in writing in your contract, on your invoice and even in your emails. 

When clients know exactly when and how to pay, there’s less room for delay or those “I didn’t realise” excuses. 

2. Invoice fast, invoice right

Don’t give clients the chance to drag their heels. 

Send the invoice as soon as you finish the work and double-check it’s correct. Missing details or errors (like a wrong purchase order number) give accounts teams a reason to push you to the bottom of the pile. 

A prompt, accurate invoice is harder to ignore.

3. Send a friendly reminder

A polite chaser a few days after the due date often does the trick. 

Keep the tone light but professional - “just checking this hasn’t slipped through the net” works better than angry demands. 

Even the best clients slip up now and then. Most of the time, late payments come down to admin, not bad intent.

4. Pick up the phone

Still no joy? Call them. 

A quick conversation cuts through endless email chains and gets you a straight answer. 

Ask for a firm payment date and follow up with a confirmation email so you’ve got a paper trail. Sometimes hearing your voice is enough to bump you up their to-do list.

5. Add late fees if you need to

If you’ve included late fees in your terms, you’re legally entitled to charge them. 

Even a small penalty can focus minds. The key is to flag this upfront - surprise charges are more likely to sour the relationship than speed up payment. Be honest and clear and then you’re within your rights to act.

6. Know when to get tough

If all else fails, you may need to escalate. 

Start with a formal letter that spells out what’s owed and gives a clear deadline. Still no payment? You can file a claim through the government’s Money Claim Online service or take it to small claims court. 

Just check the maths first - sometimes the chase costs more than the cheque.

Late payments are stressful - but they don’t have to sink your morale or your business. 

With clear terms, quick invoicing and the confidence to chase you can keep cash flowing and your client relationships solid.