A customer hasn’t paid my invoice. What do I do now?

I’m a member of several business groups on Facebook and there’s one question I seem to see over and over again.

“I’ve got a customer who hasn’t paid me. What do I do?”

Sometimes they’ve already sent three or four emails. Sometimes the invoice is months overdue. Sometimes they’re worried about upsetting the customer by chasing them. And quite often, they simply don’t know what they’re supposed to do next.

If that sounds familiar, firstly, you’re definitely not the only one.

Most people don’t start a business because they’re excited about credit control. You start because you’re good at what you do. Then at some point you discover that doing the work and sending an invoice doesn’t necessarily mean the money magically appears in your bank account on the due date.

So, what should you actually do when that happens?

Start with the simple stuff

Before assuming the worst, check there isn’t a straightforward reason why the invoice hasn’t been paid.

Was it sent to the right email address? Are the payment details correct? Does the customer need a PO number that’s missing? Is there a query sitting somewhere that nobody has dealt with?

It sounds obvious, but these things cause payment delays all the time.

It’s also worth making sure you know who actually deals with invoices at your customer’s business. The person who asked you to do the work isn’t necessarily the person who will arrange the payment.

If everything looks right and the invoice is overdue, it’s time to follow it up.

And this is where I see lots of small business owners making life harder for themselves.

Your invoice was due on Monday. Monday comes and goes and you think, “I’ll give them a few more days.”

Why?

You already gave them until Monday.

You don’t need to add an unofficial extra week onto your payment terms because you’re worried about looking pushy. A friendly email to say the invoice is now overdue and ask when you can expect payment is perfectly reasonable.

You’re not asking them for a favour. You’re asking them to pay an invoice for work you’ve already done.

If the emails aren’t working, do something different

One of the most common Facebook posts I see is some variation of:

“I’ve emailed them four times and they’re still ignoring me. What should I do?”

Please don’t send email number five. I know it might feel uncomfortable, but…pick up the phone.

I know that’s the bit lots of people hate, particularly when it’s your own business and you have a relationship with the customer. It can feel much more personal asking someone for money when it’s your money.

But you don’t need to turn into a scary debt collector.

You can simply say:

“Hi Sarah, I’m calling about invoice 1234 for £850, which was due on 10 September. I just wanted to check there’s nothing holding up payment and find out when I can expect it.”

That’s it.

You’re opening a conversation and that conversation will often tell you far more than another email ever will.

Perhaps they genuinely haven’t received the invoice. Maybe there’s a query you knew nothing about. Perhaps it’s waiting for approval. Or maybe cashflow is tight and they’re delaying payment.

Once you know what the problem is, you can actually do something about it.

If they tell you they never received the invoice, resend it while you’re speaking to them if you can and ask them to confirm it’s arrived. Then ask when it will be paid.

What I wouldn’t do is resend it and disappear for another 30 days.

Get a date

This is probably one of the simplest changes you can make to your credit control.

Don’t finish the conversation with:

“I’ll sort it.”

“It’s with accounts.”

“I’ll get someone to look at it.”

“It should be paid soon.”

None of those tell you when you’re getting your money.

Ask them what date you should expect the payment to reach your account and then make a note of it.

You don’t need an expensive credit control system if you’re a solo business owner with a handful of invoices. A spreadsheet is absolutely fine. Just record when you contacted them, who you spoke to, what they said and when they promised to pay.

And then comes the important bit. Check whether they actually do.

If somebody promises to pay you on Friday and Friday comes and goes without the money arriving, follow it up.

You don’t need to wait another week because you don’t want to pester them.

They gave you the date.

A perfectly reasonable follow-up would be:

“When we spoke on Tuesday you confirmed the invoice would be paid on Friday. I can’t see that the payment has arrived. Can you let me know what’s happened and when I can now expect it?”

Notice there’s no “Sorry to bother you again.”

You really don’t need to apologise for following up money somebody has already promised to pay you.

What if they genuinely can’t pay?

Sometimes you’ll have the conversation and discover that the problem isn’t admin at all. Your customer simply doesn’t have the money to pay the invoice in full.

You then have a decision to make.

You might decide that accepting a payment plan is better than continuing to wait for the whole amount. If you do, make sure you agree exactly how much they’re going to pay and on what dates, and get it in writing.

Then put it in your diary and monitor it.

If they miss one of the agreed payments, follow it up straight away rather than letting the arrangement drift.

And if you’ve tried repeatedly to resolve an overdue invoice and you’re still getting nowhere, there comes a point where you may need to escalate things.

For business to business invoices, you may have the right to charge statutory late payment interest and compensation. There are also more formal routes available if an invoice remains unpaid, including debt recovery and ultimately making a court claim. GOV.UK has guidance on late commercial payments, and the Office of the Small Business Commissioner also has useful information for small businesses dealing with unpaid invoices.

I wouldn’t suggest reaching for the legal threats the day after an invoice becomes overdue. There’s a lot that good credit control can achieve before you get anywhere near that point.

But equally, an invoice shouldn’t be allowed to sit unpaid indefinitely because you’re worried about having an uncomfortable conversation.

The bit I really want small business owners to remember

There’s nothing wrong with asking to be paid.

I think this is where so many solo business owners get stuck.

You know your customers. You’ve probably built good relationships with them. You want them to use you again and you don’t want to come across as difficult.

So chasing an overdue invoice can feel awkward.

But you have bills to pay too.

You’ve done the work, supplied the product or delivered the service. Your customer agreed to your payment terms.

Following up when they don’t pay you isn’t rude. It’s part of running a business.

And if you absolutely hate doing it, you’re not alone.

If your business is still small and outsourcing your credit control wouldn’t make sense, my Credit Control Toolkit was created for exactly this situation. It gives you the process, templates and call scripts to follow so that when somebody doesn’t pay, you’re not sitting there wondering what on earth you’re supposed to say next.

As your business grows, there may come a point where managing invoices, payment queries, chasing and reconciliation isn’t a good use of your time anymore. That’s where outsourced support can make sense.

But whichever stage you’re at, please don’t let an overdue invoice sit there because you feel awkward chasing it.

You did the work. You should be paid.