What to do when an invoice goes unpaid

The work is done. The invoice is out. The due date has come and gone. This guide is the playbook for when prevention has already failed. It is easy to chase too softly for too long, or to jump straight to threats. Neither works. There is a sequence that does, and most of it is admin, not confrontation.

Each step below is a stage in that sequence, with sample wording and the moment to move on to the next one.

Day numbers below are counted from the invoice due date. Day +1 means one day after the due date, Day +7 means a week after, and so on.

1. The friendly nudge

Day +1 to +3. The first message goes out a day or two after the due date, not two weeks later.

Early is better for one reason: at day +1 the message is admin. At day +14 it feels like an accusation. The longer you leave it, the more awkward it gets, both for you and for the customer.

Sample wording:

Hi [name], just a quick note that invoice [number] was due on [date]. Probably already in hand, but let me know if there is any issue.

That is it. Short, friendly, leaves the customer an easy way to reply. An invoice that misses its date may be an admin lapse on the customer's side rather than a refusal to pay. A nudge solves that.

Common mistake: waiting two weeks because day +1 feels too soon. By the time you do chase, it has become a bigger conversation than it needed to be.

2. The follow-up

Day +7 to +14. If the nudge has been ignored, the follow-up asks for something specific.

The shift here is small but important: you are no longer checking in, you are asking for a payment date. Open-ended messages let the customer reply with nothing in particular. A specific question needs a specific answer.

Sample wording:

Hi [name], following up on invoice [number], which is now a week overdue. Could you confirm the date payment will be made?

Reference the agreed terms if the customer has gone quiet. It reminds them, without saying it directly, that this was set out at the start.

Common mistake: "let me know when you can pay" instead of "could you confirm the date payment will be made". The first gives the customer nothing to commit to. The second gives them something to either answer or visibly avoid.

3. The formal demand

Day +14 to +30. The tone changes here. Still professional, but the message now references the payment terms, signals what comes next, and sets a hard date.

For business customers, this is the moment to mention statutory interest. For homeowners, mention contractual interest only if it was written into the quote.

Sample wording:

Hi [name], invoice [number] is now [X] weeks overdue. Under the payment terms agreed on [date], the invoice is now accruing late payment interest. If payment is not received by [date], I will begin formal recovery, starting with a Letter Before Action.

A clear deadline, a clear consequence. Nothing more.

Common mistake: threatening something you do not intend to follow through on. From this stage onwards, every message you send may end up in front of a court. Write it so you would be comfortable reading it back there.

4. Letter Before Action

If the formal demand passes without payment, the next step is a Letter Before Action. This is the last formal step before court. See the full guide to sending a letter before action for what it must contain and the rules that differ for individuals and limited companies. Where the customer is an individual or a sole trader, the Pre-Action Protocol for Debt Claims requires you to give them at least 30 days to respond, with specific information included in the letter. Where the customer is a limited company, or any other business that is not a sole trader, the protocol does not apply. The Practice Direction on Pre-Action Conduct does instead, and it expects a reply within a reasonable time, 14 days in a straightforward case. The same letter does the job.

The letter has to set out who you are, what the debt is for, how much is owed, how the figure was calculated (including any interest), and what will happen if they do not respond by the deadline. Give an individual or sole trader at least 30 days. For a limited company, 14 days is usually enough. For an individual or sole trader, the letter must also say whether interest is still being added and how to pay. It must come with an up-to-date statement of account (or, if you have never sent one, the interest and charges set out in the letter), the protocol's Information Sheet and Reply Form, and a Financial Statement form.

A well-written Letter Before Action can get a debt paid on its own. By this stage the customer understands two things: you know what you are doing, and the next step is real.

A short version of the covering letter. For an individual or sole trader, send it with the enclosures above:

Dear [name], this is a Letter Before Action regarding invoice [number] dated [date], for the sum of £[amount] plus £[interest] in late payment interest. The invoice remains unpaid [X] weeks after its due date and after [X] reminders. If I do not receive payment in full or a reply within 30 days of the date of this letter, I may issue a money claim through the County Court. You may have to pay extra costs, and a County Court Judgment could be entered against you. Unless it is paid in full within one month, a judgment stays on the Register of Judgments for six years, where lenders can see it.

Send it by recorded delivery. Keep the proof of postage.

5. Money claim through the County Court

If the deadline passes without payment or a serious response, the next step is a money claim through gov.uk. If an individual sends back the Reply Form, wait at least another 30 days from receiving it, or from sending any documents they asked for, and give them at least 14 days' notice before you issue a claim. You can make the claim online, you pay a court fee which scales with the size of the claim, and the fee is normally added to what the customer owes if you win.

If the customer does not respond, or responds and loses, the court issues a County Court Judgment. If they pay in full within one month, they can have it removed from the register. Otherwise it stays on the Register of Judgments, Orders and Fines for six years, and banks and loan companies use that register to decide whether to give them credit.

For higher-value or disputed debts, the Small Business Commissioner has free guidance. For anything large or complex, talk to a solicitor before you file.

6. When to stop

Not every debt is worth chasing. If the customer has gone bankrupt, if the amount is small, or if the time cost has overtaken the money cost, the right answer is to write it off and move on.

A clean write-off is a better outcome than six months of low-grade stress for a debt that was never coming back. Keep the records (invoice, chase history, Letter Before Action if sent). If you are VAT registered and have already paid the VAT on the invoice to HMRC, you can usually claim it back as bad debt relief once the debt is more than six months overdue. You must have written it off in your VAT records and claim within four years and six months.

Common mistake: chasing for six months a debt that should have been written off in month one. The cash cost of writing off is small. The time cost of not writing off compounds quietly across every other job you are trying to deliver.

Business or homeowner: what changes

The chase sequence is the same for both. The legal levers are not.

For business customers, you can charge statutory interest and a fixed compensation fee on a late invoice even if your terms do not mention them. The right comes from the Late Payment of Commercial Debts (Interest) Act 1998. If your terms set a different late payment rate for a business customer, that rate applies instead of statutory interest, and the fixed sum does not apply either.

For homeowners, you can only charge interest if it was written into the payment terms before the work started. Even then, the rate has to be fair. Government guidance on unfair terms says a rate set well above bank base rates is likely to be unfair, and an unfair term is not binding on a homeowner at all. If there was no interest in your terms, you can still ask the court to award interest at the end of a successful claim, but you cannot add it to your invoices.

If you are not sure your payment terms cover this, see our guide to writing payment terms that actually get you paid.

Before you escalate, check

• The work was agreed in writing before it started
• The completion was confirmed in writing before the invoice went out
• The invoice clearly states the due date and the agreed terms
• You have sent the friendly nudge, the follow-up, and the formal demand
• You have kept copies of every message and the proof of postage on any letter

If any of these are missing, fix them on the next job. They are what make the escalation actually work when you need it.

Trame can send the chase sequence automatically once you turn reminders on, and keeps every message timestamped against the invoice, which is exactly what you need if it ever has to be shown to a court.

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Frequently asked questions

Getting paid: full guide series

• Why UK tradespeople get paid late, and how to stop it
• How to write payment terms that actually get you paid
• What to do when an invoice goes unpaid (you are here)
• How to chase a friend or referral for payment
• How to send a letter before action for an unpaid invoice