An overdue invoice usually gets paid once the customer can see you are organised and serious. This guide sets out the usual steps in order, from the first reminder to court and enforcement, for invoices owed by businesses in England, Wales and Scotland.
1. Check your position first
Before chasing, make sure you can prove the debt. Gather the contract or order, the invoice, proof that the goods or services were delivered, and any emails where the customer accepted the work or the amount.
Check the customer on Companies House. Confirm the exact legal name and registered office, and whether the company is active, in liquidation or administration, or facing strike-off. If it has entered a formal insolvency, the recovery route changes and you would usually claim through the insolvency practitioner instead.
2. Chase early and in writing
Send a clear reminder as soon as the due date passes: invoice number, amount, original due date and a date for payment. Follow up by phone and ask whether there is a query holding things up. Keep a written record of every contact. If the customer offers to pay over time, agree the instalments in writing.
3. Add late payment interest and compensation
For business-to-business invoices, the law lets you add statutory interest and a fixed sum. Where no payment date was agreed, a payment is usually late 30 days after the customer receives the invoice, or after delivery if that is later. Statutory interest is 8% plus the Bank of England base rate. You can't claim it if your contract sets a different rate of interest.
A fixed sum can be added once per late payment, on top of interest:
Check the current wording on gov.uk before you quote a figure to a customer. Where applicable, Recovia adds statutory interest and late payment compensation to the debtor's balance.
4. Send a letter before action
If reminders don't work, send a formal letter before action (also called a letter before claim). It sets out what is owed, why, and what you will do if it isn't paid.
Read our guide to the letter before action for what to include.
5. Going to court
England and Wales. You can make a money claim through the courts, including online through gov.uk. Claims worth up to £10,000 normally go to the small claims track. Court fees depend on the amount claimed, so check the current fees on gov.uk. Act in good time: a claim for a simple contract debt must usually be brought within six years.
Scotland. The procedure is different. Claims under £5,000 normally use simple procedure in the sheriff court. Larger or complicated claims use ordinary cause. Read our guide to debt recovery in Scotland.
6. Enforcing a judgment
A judgment doesn't always mean payment. In England and Wales, if you are owed between £600 and £5,000, you can apply to either the County Court or the High Court to enforce it. The High Court route needs at least £600.
In Scotland, a sheriff officer must first serve a charge demanding payment. If the debtor still doesn't pay, you can instruct a sheriff officer to enforce the decision.
7. Statutory demands and winding up
If a company owes more than £750 and the debt is not disputed, a statutory demand gives it 21 days to pay or reach an agreement. If it does neither, you may be able to petition to wind the company up. This is a serious step. Don't use it where the debt is genuinely disputed. A debt more than six years old usually can't be the subject of a statutory demand.
When to bring in a debt recovery agency
It usually makes sense to bring in help once your own chasing has stopped producing payment, or when the customer has stopped replying. The older an invoice gets, the harder it can be to recover.
Recovia Ltd is a UK commercial debt recovery agency. We action cases within 1 working day of receiving the files, often the same day. Every case is managed and assessed individually, with personalised contact and field visits where appropriate. We only recommend court or legal action once other options have been exhausted and recovery is likely, and you are under no obligation to take that step. Where legal action is needed, we work with our legal partner, an established firm of solicitors.
No collection, no fee on suitable cases. Call 01527 369593 (Monday to Friday, 08:00 to 20:00), email contact@recoviaholdings.co.uk or send us the details through our website.
This guide is general information, not legal advice. Check current rules and fees on gov.uk or mygov.scot before relying on them.