How to Chase an Overdue Invoice

Unless you have the luxury of an in-house credit controller - which is something even some larger firms can't afford - you might be tempted to take a head-in-the-sand approach to chasing overdue invoices, and simply try to pretend they never happen.

Sadly they do happen, even from trusted long-term customers, and that can lead in turn to some soul-searching: Why didn't they pay? Did I do something wrong? Is there no trust in business any more?


The first thing to recognise is that the answers to these questions don't really matter in most cases; unless the customer has told you of an objection to paying, or a reason why they can't pay on time, all you can do is start to take the appropriate action.

Secondly, even if you can find out the answers, they may not directly help you to get paid any sooner - and recovering what you are owed is often much easier if you take a dispassionate approach. Be ruled by your head, and not by your heart.

1. Set emotions aside

This is worth saying again, and should be your first step - and something you commit to throughout the recovery process.

If you can set your emotions to one side, you can take a more logical and timely approach to recovering your funds, and escalate the process as necessary.

That does not preclude offering flexibility to valued customers, such as extended deadlines or payment by instalments, but these decisions should still be made based on what will get your money to you fastest and in the fullest, and not on generosity and sentiment.

2. Check and check again

Make sure that you're in the right and that your customer is in the wrong - double check that payment hasn't been received, that the invoice details were correct, and that you sent it to the correct place.

A simple error is often all that has gone wrong, and if you keep things amicable at this stage you may be able to have that corrected quickly and painlessly.

3. Reiterate payment terms

If there is no immediate resolution or clear explanation as to why you have not been paid, set a final deadline and restate any applicable payment terms - such as your right to charge statutory late payment costs, interest and recovery fees on top of the amount owed.

You should have agreed these charges in advance, but simply restating them can provide significant motivation to non-paying customers to clear their debts before any penalties start to go on to the total.

4. Use outside help

If your customer won't listen to you, they might respond to a debt collector; nobody wants to get a call from a debt recovery company.

Have a polite and professional agency contact the non-paying customer, reminding them of everything they should already know: the amount owed; the deadline; the financial penalties they risk facing; the escalated action you will take next.

5. "I'll see you in court"

Finally, if all else fails, court action can back up your reasonable and ethical right to expect payment with a legal ruling demanding that the funds be transferred to you.

In extreme cases, you may even petition for the client's company to be wound up, preventing them from treating any other suppliers the way they have treated you.

Fairness and Flexibility

This is a trimmed-down process, and it is up to you to decide to what extent you choose to be flexible on any given invoice.

Ask yourself whether you truly believe the customer will pay when they can - and whether they will be able to pay on time next week, month or quarter?

Decide whether to continue supplying them in the meantime; in most cases, stopping work will send the clearest message that you have stopped treating them as a client and started treating them as a debtor.

And if you do decide to take firmer action, be prepared for some difficult and occasionally  abusive phone calls from the debtor; once you appoint a recovery agent, you can simply direct any enquiries to them, and often the louder your debtor is being, the less of a genuine defence they have against your claim.

Be logical and professional from the outset and throughout any recovery action, and you can maximise your chances of receiving your funds, as well as ensuring the debtor does not mistreat any future credit providers in the same way.

Over 150 Years Of Industry Experience

Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.

Image used with the very kind permission of twitter user Neil Garrett, thanks Neil!

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