How to Chase an Overdue Invoice in the UK: A Complete Guide for Business Owners

Unpaid invoices cost UK small businesses billions of pounds every year. Knowing how to chase an overdue invoice efficiently — without damaging the business relationship or wasting hours of management time — is one of the most practical skills any business owner can develop.

This guide walks you through the full process, from the first polite reminder to formal legal action, so you know exactly what to do at each stage and when to call in professional support.

Step 1: Send a Payment Reminder Immediately

The moment an invoice passes its due date, act. Do not wait a week hoping it will resolve itself. Send a brief, professional payment reminder by email on day one. Keep the tone neutral — most late payments at this stage are the result of oversight rather than deliberate non-payment.

A good first reminder should include:

• The invoice number, amount, and original due date
• A clear request for payment within the next three to five working days
• Your payment details
• A note that you are happy to discuss any queries

If you use accounting software such as Xero or QuickBooks, automated payment reminders can handle this stage for you. Set them up before the invoice is due so the reminder fires automatically without any manual effort.

Step 2: Follow Up by Telephone

If the email reminder has not produced payment within five working days, call the debtor directly. Email is easy to ignore; a telephone call is much harder to avoid. Speak to the person responsible for authorising payment, not just a general accounts contact.

On the call, remain calm and professional. Confirm that they received the invoice, ask if there are any queries preventing payment, and agree a specific payment date. Follow up the call immediately with a written confirmation of what was agreed, including the date and amount.

This written follow-up is important: it creates a clear record of the conversation, which may be needed later if the matter escalates.

Step 3: Issue a Formal Overdue Notice

If the agreed payment date passes without payment, send a formal overdue notice. This is a step up in tone from the initial reminder. It should state:

• That the invoice remains unpaid despite previous reminders
• The total amount now owed, including any contractual or statutory late payment interest accrued
• A firm deadline for payment, typically seven days
• A clear statement that non-payment will result in further action

Under the Late Payment of Commercial Debts Act 1998, you are entitled to add statutory interest at 8% over the Bank of England base rate and to claim debt recovery compensation of between £40 and £100 per invoice. Including these figures in the overdue notice signals that you know your rights and are prepared to enforce them.

Step 4: Send a Letter Before Action

If the formal overdue notice produces no response, the next step is a letter before action (LBA). This is a formal legal notice that you intend to issue court proceedings if payment is not received within a specified period — typically 14 days for commercial debts.

The LBA is a legal requirement before you can issue a County Court claim. Courts expect parties to have attempted to resolve the dispute before litigation, and an LBA demonstrates that you have done so. It also gives the debtor a final, unambiguous opportunity to pay and avoid the cost and reputational damage of court proceedings.

An effective LBA should be sent by first-class post with proof of postage (or by tracked recorded delivery), and by email. Keep a copy. State the exact amount owed, including interest and compensation, and name the specific legal action you intend to take if payment is not received.

Step 5: Instruct a Professional Debt Collection Agency

At any point from the LBA stage onwards, instructing a professional debt collection agency is a sound option, particularly if:

• You do not have time to manage the escalation process yourself
• The debtor is unresponsive or evasive
• You are uncertain of the debtor’s current address or financial position
• You want to preserve the business relationship if possible

A reputable agency brings specialist tools to the process: tracing services to locate debtors who have moved, credit reference data to assess financial position, and experienced negotiators who know how to apply effective pressure without the need for immediate court action. Many agencies operate on a no win no fee basis, meaning you pay nothing unless they recover the debt.

Instructing an agency does not mean giving up control. You remain the creditor; the agency acts on your authority. You can set parameters around what settlements are acceptable and be kept informed of progress throughout.

Step 6: Issue a County Court Claim

If the debt remains unpaid after the LBA deadline and agency intervention has not produced a result, the next step is to issue a County Court claim through the Money Claim Online (MCOL) service at gov.uk. For debts up to £100,000, this is a straightforward online process.

Court fees range from £35 for debts under £300 to £455 for debts between £5,000 and £10,000. If the debtor does not defend the claim within 14 days, you can apply for a default judgment — a County Court Judgment (CCJ) — which is issued in your favour. If the debt is defended, the matter proceeds to a hearing.

A CCJ is not the end of the process; it is the legal mechanism that unlocks enforcement options. Once you have a CCJ, you can pursue the debt through several routes:

• Warrant of control: County Court bailiffs seize and sell the debtor’s goods
• Charging order: Secure the debt against the debtor’s property
• Attachment of earnings: Deduct payments directly from the debtor’s salary
• Third-party debt order: Freeze and redirect funds held in the debtor’s bank account
• High Court enforcement: Transfer the CCJ to the High Court for enforcement by a High Court Enforcement Officer (HCEO), which is often faster and more effective for larger debts

Step 7: High Court Enforcement

For CCJs over £600, you can transfer the judgment to the High Court and instruct a High Court Enforcement Officer. HCEOs have broader powers than County Court bailiffs: they can act more quickly, charge higher fees that are recoverable from the debtor, and are generally more effective at securing compliance from non-paying debtors.

The transfer process requires filing a form N293A at the County Court. Once transferred, the HCEO will visit the debtor’s premises to demand payment or seize goods. The prospect of an HCEO visit is often sufficient to produce immediate payment.

Practical Tips to Prevent Overdue Invoices

Efficient chasing is important, but prevention is always preferable. Consider these measures to reduce the frequency of overdue invoices:

• Credit check new customers before extending credit terms
• Issue invoices immediately on delivery of goods or services, not at month end
• Set clear payment terms in your contract and on the invoice itself
• Require a deposit for larger orders to reduce your exposure
• Invoice by email with read receipts so you can prove delivery
• Review your debtor book regularly and flag anything approaching 30 days overdue

Good credit control habits reduce the time and cost spent chasing payments and improve your cash flow without any change to your pricing or customer base.

When to Call Jack Russell

If you have reached the letter before action stage with no result, or if you simply do not have the time to manage the escalation process, Jack Russell Debt Collection can take over the file and pursue recovery on your behalf. We operate on a no win no fee basis for most commercial debt cases and have a strong track record of recovering debts that creditors have struggled to collect themselves.

A free, no-obligation consultation takes less than ten minutes. Contact us today to discuss your outstanding invoices and find out how quickly we can start recovering what you are owed.

Disclaimer: This article is for general information purposes only and does not constitute legal or financial advice. For advice specific to your situation, consult a qualified debt recovery specialist or solicitor.