What to do if a client does not pay an invoice

Unpaid invoices can create serious cash flow problems for freelancers, contractors and small businesses. If a client does not pay on time, it is important to stay calm, check the facts, communicate clearly and keep good records before deciding what to do next.

1. Check the invoice details first

Before assuming the client is refusing to pay, check that the invoice itself is correct. Simple mistakes can delay payment, especially if the client has an accounts department.

Check the following:

• the invoice number is correct;
• the client name and billing address are correct;
• the amount matches the agreed price;
• VAT has been handled correctly, if relevant;
• the payment due date is clear;
• your bank details or payment instructions are included;
• the invoice was sent to the correct person or department.

2. Confirm the payment terms

Next, check your contract, quotation, email agreement or invoice terms. You need to know when the payment was actually due.

Common payment terms include:

• payment on receipt;
• 7 days;
• 14 days;
• 30 days;
• end of month payment terms;
• milestone or staged payments.

If the invoice is not yet overdue under the agreed terms, it may be better to send a friendly reminder rather than a formal overdue notice.

3. Send a polite first reminder

If the payment date has passed, send a short and polite reminder. Many unpaid invoices are caused by admin delays, missed emails or approval processes rather than bad intent.

For more examples, see: How to write a polite overdue invoice reminder email.

4. Follow up more firmly if there is no response

If the client does not reply, send a firmer follow-up. Keep the tone professional and factual. Include the invoice number, amount, due date and a clear request for payment by a specific date.

Avoid emotional language or accusations. A clear written record is more useful than an angry email.

5. Check whether the invoice is disputed

Sometimes a client does not pay because they are unhappy with the work, believe the invoice is wrong, or are waiting for something to be corrected. If there is a genuine dispute, it is important to understand it clearly.

Ask the client to explain:

• which part of the invoice they dispute;
• why they believe payment is not due;
• what evidence they rely on;
• whether they are willing to pay the undisputed amount;
• what would resolve the issue.

If there is a dispute, avoid adding pressure without understanding the facts. It may be sensible to seek professional advice.

6. Consider late payment interest and compensation

If the invoice is a qualifying commercial payment, you may be able to claim late payment interest and fixed compensation. For many UK business-to-business debts, statutory interest is commonly calculated at:

Fixed compensation may also apply depending on the amount of the unpaid debt:

• £40 for debts up to £999.99;
• £70 for debts from £1,000 to £9,999.99;
• £100 for debts of £10,000 or more.

You can estimate interest and compensation using our UK late payment interest calculator.

Useful background guides:

• What is statutory interest on late commercial payments in the UK?
• How to calculate late payment interest on overdue invoices
• Late payment compensation: £40, £70 and £100 explained
• When can a UK business charge late payment interest?

7. Keep all evidence organised

Good records are essential if the matter becomes serious. Keep everything in one folder so you can quickly review the timeline.

Keep copies of:

• the contract, quotation or written agreement;
• the invoice;
• proof that work was completed or goods were delivered;
• emails and messages with the client;
• payment reminders;
• notes of phone calls;
• any promise to pay or payment plan;
• evidence of any dispute raised by the client.

8. Offer a short payment deadline or payment plan

If the client is having cash flow problems but accepts that the invoice is due, you may choose to offer a short deadline or a payment plan. This is a commercial decision.

If you agree a payment plan, put it in writing. Include:

• the total amount owed;
• each payment amount;
• each payment date;
• what happens if a payment is missed;
• whether interest or charges are included.

9. Decide whether to pause further work

If the client has not paid, you may need to consider whether it is sensible to continue doing more work for them. Check your contract before stopping work, especially if deadlines or service obligations apply.

For future projects, consider using:

• deposits or upfront payments;
• milestone payments;
• clear written payment terms;
• late payment clauses;
• credit checks for larger clients;
• limits on work before payment is received.

10. Consider escalation if payment still does not arrive

If reminders do not work and the invoice remains unpaid, you may need to consider escalation. Depending on the situation, possible next steps could include:

• sending a final written reminder;
• using a debt recovery service;
• seeking legal advice;
• using mediation or negotiation;
• considering a formal claim if appropriate.

Escalation can involve cost, time and risk, so it is worth getting proper advice before taking formal action.

Practical checklist

Official sources

You can check official UK information here:

• GOV.UK: Late commercial payments — interest and debt recovery
• Bank of England: Bank Rate