How do you chase an unpaid invoice?
TL;DR, the essentials
- Start chasing an unpaid invoice as soon as it goes overdue: the longer it sits, the harder it is to collect.
- Escalate gradually: a polite reminder, then a firmer chase, then a formal letter before action that sets a clear deadline.
- On late B2B invoices, many countries let you add statutory interest and a fixed recovery charge. In the UK that is 8% above the Bank of England base rate, plus £40 to £100 per invoice.
- If chasing fails, court is the last resort: the small claims track covers debts up to £10,000, and you generally have six years to act in England and Wales.
A sent invoice is not a paid invoice. When a customer misses the due date, the money you are owed becomes a cash-flow problem that grows every week you leave it. The good news: a firm, well-documented process resolves most cases without ever reaching a courtroom. This guide explains how to chase unpaid invoices from the first friendly reminder to the letter before action, what you can charge on top of the debt, and what to do if the customer still will not pay. The legal detail is UK-focused and flagged, because rules vary by country.
When is an invoice actually overdue?
An invoice is overdue the day after its due date passes without payment. That date comes from your agreed payment terms: net 30 is the common default, but it can be net 14, due on receipt or whatever your contract sets. In the UK, if no term is agreed, the law treats the invoice as due within 30 days.
The key point is that once the deadline passes, the invoice is late automatically. You do not need the customer to acknowledge it, and in many countries your right to interest starts running from that first overdue day. That is exactly why a prompt, documented chase carries so much weight.
In one sentence
Past the due date the invoice is late on its own, but it is up to you to start chasing to actually get paid.
If you want to nail down your deadlines and defaults, our guide to invoice payment terms covers net 30, legal caps and how to state a due date that cannot be disputed.
Why should you chase early?
Time works against the creditor. A fresh debt is almost always recovered amicably; a debt several months old runs into a customer with other priorities, tighter cash or, worst case, insolvency. Chasing early protects your cash flow and signals that you watch your accounts closely.
The invoice goes overdue
The due date passes: your chase begins with a courteous tone and a clear reminder of the invoice.
The chase gets firmer
With no reply, a second reminder restates the deadline and any interest and recovery charges that now apply.
The letter before action
The final step before court, giving a firm deadline and warning of legal proceedings.
Chasing is not aggressive, it is good financial hygiene. Most late payments come down to an oversight, a lost invoice or an internal approval queue on the customer’s side. A clear reminder settles the large majority of cases before any escalation.
What are the steps to chase an unpaid invoice?
Effective chasing is a graduated sequence. You start gently and firm up, leaving a written trail at every stage. Here is a proven pattern to adapt to your customer relationship:
| Stage | Indicative timing | Channel and tone |
|---|---|---|
| 1st reminder | Day 1 to day 7 overdue | Email or call, polite, a simple heads-up |
| 2nd reminder | Around day 14 | Firmer email, mentions interest and recovery charges |
| Phone call | Around day 21 | Direct conversation, the hardest step to ignore |
| Letter before action | Day 30 onward | Formal written demand with a firm deadline |
Indicative timeline, July 2026. The gap between reminders is a matter of your credit-control policy; what matters is consistency and a clear paper trail. A phone call is one of the most effective steps because a customer cannot ignore a direct conversation, so confirm it afterwards in writing.
Every time you chase, restate the invoice number, date, total amount and the missed due date, and attach a copy of the invoice. That removes the “never received it” excuse and makes immediate payment easy.
Good habit
Pair the written chase with a call. A direct conversation often unlocks payment by clearing up a misunderstanding, then you confirm by email to keep the record.
Can you charge interest and recovery costs?
In many countries, yes. On a late B2B invoice you can often add two things to the principal, provided your terms and invoice made them clear up front:
- Statutory interest. In the UK, under the Late Payment of Commercial Debts (Interest) Act 1998, a supplier can charge 8% plus the Bank of England base rate on an overdue commercial invoice, running daily until the balance is cleared. The EU applies a similar rule tied to the European Central Bank reference rate plus a margin.
- Fixed recovery compensation. A flat sum per overdue invoice, claimed without proving the cost. In the UK it is tiered by debt size; under the EU Directive the minimum is €40 per invoice.
| Debt size (UK example) | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Figures indicative, July 2026, and jurisdiction-specific. UK amounts follow the Late Payment of Commercial Debts (Interest) Act 1998; the Bank of England base rate is revised over time, so recalculate with the rate in force when the invoice becomes overdue. EU equivalents follow Directive 2011/7/EU. Confirm the rules that apply to your contract and country.
Check before you add charges
To rely on these amounts, state them in advance. The fixed compensation applies per overdue invoice, not once per customer, and if your actual collection costs are higher you can usually claim the difference on evidence.
Invoices going out without late-payment terms?
Our comparison ranks the tools that add interest and recovery charges automatically, and chase overdue invoices for you.
What is a letter before action?
When reminders go unanswered, the letter before action (also called a letter before claim) is the final step before court, and in England and Wales it is expected under the Pre-Action Protocol for Debt Claims. Send it in writing, keep proof of delivery, and make it complete. A solid letter before action includes:
- A clear statement that it is a formal demand for payment;
- The invoice details: number, date, total amount and the missed due date;
- The full sum now due: principal, interest calculated to date and any fixed recovery charge;
- A summary of the reminders already sent;
- A firm deadline to pay, commonly around 14 days;
- A clear warning that you will start court proceedings if payment is not made in time.
Beyond its psychological effect, this letter matters procedurally: it evidences your attempt to settle and is the document a court will look for first. Skipping it weakens your position and can affect costs.
Do not skip this step
Going straight to a claim without a letter before action undermines your case and can be penalised on costs. The letter, with proof of delivery, is your evidence that you gave the customer a fair chance to pay.
What if the customer still will not pay?
If the letter before action fails, court is the last resort. In England and Wales the route depends mainly on the amount and whether the debt is disputed:
Small claims track (up to £10,000)
Debts up to £10,000 are normally handled on the small claims track in the County Court, and you can start a claim online through Money Claim Online. It is designed to be usable without a solicitor.
Fast track and beyond
Claims between £10,000 and £25,000 generally go to the fast track, and larger claims to the intermediate or multi-track, where legal representation is more likely.
Enforcement
A judgment is not payment. If the debtor still does not pay, you enforce it, for example through a warrant of control (bailiffs), an attachment of earnings or a charging order.
Thresholds and process indicative, July 2026, England and Wales, and subject to change. Sources: gov.uk (Make a court claim for money) and the Pre-Action Protocol for Debt Claims. Scotland and Northern Ireland have separate systems, and other countries set their own rules.
How long do you have to act?
Under the Limitation Act 1980 you generally have six years to pursue an unpaid invoice in England and Wales (five years in Scotland). After that the debt becomes statute-barred and courts will normally not enforce it, so do not let a debt drift indefinitely.
How should you word a reminder?
An effective chase is clear, factual and calm. Three principles apply at every level:
- Get to the point. A precise subject line, the invoice number, amount, missed due date, the action expected and how to pay, all in a few lines.
- Stay professional. Even at the letter before action, a measured tone protects the relationship and does not weaken your legal position.
- Escalate gradually. The first reminder assumes an oversight and offers help; the second flags interest and charges; the letter before action warns of court.
Keep every exchange: dates, emails, delivery receipts. That history is your audit trail, and it is essential if the case ends up in front of a judge.
Good habit
Offer a way to pay in the very first reminder: an online payment link, a short payment plan, or your bank details. Making payment easy collects the money far faster than an early threat.
How do you prevent late payment in the first place?
The best collection is the one you never have to do. A few habits cut the risk of late payment sharply:
- Invoice promptly and cleanly, with a precise due date and your late-payment terms clearly stated.
- Take a deposit on large orders so you are not exposed to the full amount for weeks.
- Credit-check new B2B customers before extending long terms.
- Schedule reminders even before the due date, framed as a helpful heads-up.
A reminder sent a few days before the deadline, presented as a courtesy, heads off a large share of the delays that are really just oversights.
Automate your chasing end to end
Our selection brings together the tools that track every invoice status and fire off scheduled reminders, with no re-keying.
Should you chase by hand or with software?
For a one-off unpaid invoice, a well-written email will do. But as volume grows, manual chasing becomes a time sink and a source of missed follow-ups: overdue invoices no one spots, reminders never sent, history scattered across an inbox and a spreadsheet.
This is where invoicing software transforms collection. It flags overdue invoices automatically, sends scheduled, personalised reminders, calculates late-payment interest, adds the fixed recovery charge and keeps a time-stamped record of everything. You get a real-time view of your receivables and cash flow without re-keying a thing, and nothing slips through the cracks.
Next step
Ready to stop chasing payments by hand? See our best invoicing software 2026 comparison, or explore the invoicing hub for guides and definitions from quote to cash.
Frequently asked questions
How soon should you chase an unpaid invoice?
From the day after the due date. The invoice is overdue automatically once the deadline passes, with no need for the customer to acknowledge it. A polite first reminder within the first week clears most oversights, followed by a firmer reminder around day 14, a phone call, then a letter before action from day 30 if needed.
Can you charge interest on an overdue invoice?
In many countries, yes. In the UK, under the Late Payment of Commercial Debts (Interest) Act 1998, a supplier can charge statutory interest of 8% plus the Bank of England base rate on an overdue commercial invoice, plus a fixed recovery charge of £40 to £100 depending on the debt size. Rates change over time and rules vary by country, so recalculate with the rate in force when the invoice becomes overdue.
What is a letter before action?
It is a formal written demand for payment sent before starting court proceedings, expected in England and Wales under the Pre-Action Protocol for Debt Claims. It states the invoice details, the full sum due including interest and charges, the reminders already sent, a firm deadline (often around 14 days) and a clear warning that you will start a claim if payment is not made. Keep proof of delivery.
What if the customer still refuses to pay?
After a letter before action goes unanswered, court is the last resort. In England and Wales, debts up to £10,000 are handled on the small claims track and can be started online through Money Claim Online, without needing a solicitor. Larger claims go to the fast or multi-track. A judgment can then be enforced through bailiffs, an attachment of earnings or a charging order.
How long do you have to chase an unpaid invoice?
Under the Limitation Act 1980 you generally have six years to pursue an unpaid invoice in England and Wales, and five years in Scotland. After that the debt becomes statute-barred and courts will normally not enforce it. Other countries set their own time limits, so act promptly rather than letting a debt drift.