How to chase an unpaid invoice without falling out with the customer

Last updated: September 2026

Assume it was forgotten, because it usually was

The instinct when an invoice goes past due is to assume the worst. In reality most overdue invoices belong to people who fully intend to pay and have simply not done it. The email arrived on a Tuesday, they were going to sort it at the weekend, and then they did not.

That matters because it tells you what tone to start with. A first chase written as though the customer is dodging you will insult the ninety percent who are not, and it rarely speeds up the ten percent who are.

Make paying easier than remembering to pay

The cheapest way to reduce chasing is to remove the friction from paying. An invoice that requires the customer to open their banking app, type a sort code, type an account number, type a reference and get all of it right is an invoice that gets postponed.

A payment link they can tap from the invoice email removes every one of those steps. In Dispatch, the invoice goes out as a branded PDF by email and the customer can pay it by card securely online from the same message. Part payments and deposits are supported, and you can record any payment (card, transfer, cash) against the invoice as it comes in, so the balance on screen is the real balance.

A chase sequence that works

Escalate slowly and predictably. The point of a sequence is that each step is slightly firmer than the last, so you never have to jump from silence to threat.

1. A few days past due: a nudge. Short, friendly, no accusation. “Just checking this one reached you, here is the link again.” Most payments arrive here.
2. Around ten days: a reminder with specifics. Restate the invoice number, the amount, the date it was due and the payment link. Ask a direct question: is there anything holding it up?
3. Around three weeks: a firmer note. Still polite, but state plainly that the invoice is now significantly overdue and ask for a payment date. This is the point to pick up the phone, because email has demonstrably not worked.
4. Beyond that: a decision. Formal written demand, a late-payment charge if your terms allow one, or in the last resort the small claims process. By now you are no longer chasing, you are choosing.

Dispatch can run the first three steps for you. Switch reminders on and an unpaid invoice chases itself: three emails at 3, 10 and 21 days past due, sent in your name, and then it stops rather than nagging forever. Reminders are off by default, can be turned off on any individual invoice, and are never sent for an invoice you have not actually emailed to the customer.

Some of what is outstanding is not late at all

On commercial work a main contractor holds retention — usually 5% of every invoice, half released at practical completion and half after the defects period, often a year later. It is your money and it is genuinely outstanding, but it is not overdue, and chasing it early tells a contractor you do not understand your own contract.

This is the one place automatic reminders can do real damage if the software is naive about it. An invoice whose main portion has been paid still shows money owed and a due date weeks in the past, so a reminder engine that only knows those two things will email your customer, in your name, demanding money nobody owes yet. Dispatch splits an invoice into parts with their own dates and will not chase a part before its date arrives — and when it does chase, it says what is being held back, so the smaller figure does not read as a mistake.

Know what the late payment actually cost you

Between businesses, the Late Payment of Commercial Debts (Interest) Act 1998 gives you a right to interest at 8% above the Bank of England base rate, plus fixed compensation for recovery costs — £40 on debts under £1,000, £70 up to £10,000 and £100 above that. Most trades never claim it, and a large part of the reason is that nobody wants to work it out at nine at night.

The catch that trips people up is which base rate applies. It is not today’s. The Act uses the rate as it stood on the 30 June or 31 December before the debt fell late, and holds it there for the whole six-month period — so a debt that went overdue in March is calculated on the previous December’s rate, even if the Bank has moved it twice since.

Dispatch works this out for you. Enter the two Bank of England figures each year and an overdue commercial invoice shows what you are entitled to, using the right rate for the date that invoice actually fell late. The final reminder can state the figure rather than only referring to the Act. It is never added to the invoice and never charged automatically — it is a number you can choose to use, in a demand or on the phone. Domestic invoices show nothing at all, because the Act does not apply to them.

Prevention beats chasing

Three habits remove most of the problem before it starts.

• Invoice immediately. An invoice raised the day the work finishes gets paid faster than one raised at the end of the month, because the customer still has the job fresh in mind and can see the value of what you did.
• Take a deposit. A customer with money already committed behaves differently from one with nothing at stake. See quoting with a deposit.
• State your terms on the invoice. “Payment due within 14 days” is a fact the customer can act on. “Payment on receipt” is a hope.

When something is genuinely disputed

Occasionally an invoice is unpaid because the customer is unhappy, and no reminder sequence will fix that. The tell is silence following a specific complaint rather than silence following nothing at all.

Deal with the complaint directly and separately from the money. If part of the invoice is agreed and part is contested, ask for the agreed part now and settle the rest afterwards; that keeps cash moving and narrows the argument. If a figure genuinely needs correcting, issue a credit note rather than quietly editing the original, so your records still show what happened and when.