What to Do When a Business Invoice Is Overdue

Updated 18 August 2026 · 8 min read · General business guidance

An overdue invoice is easier to resolve when you treat it as a process rather than an emotional confrontation. Start by checking that the invoice is genuinely due, that it reached the right person and that there is no legitimate dispute holding it up.

1. Check your own records first

Was the invoice actually sent?
Is the due date correct?
Did the customer require a PO number or specific portal?
Have you already received payment under a different reference?
Is there an unresolved complaint about the work?

2. Send a polite reminder

State the invoice number, amount and due date. Attach the invoice again. Ask whether anything is needed from you to process payment. The first reminder should make it easy for an accounts team to resolve the issue quickly.

3. Follow up with a clearer deadline

If the invoice remains unpaid, send a second written reminder and keep a record. If you speak by phone, follow the call with an email summarising what was agreed. Documentation matters if the problem later becomes a formal dispute.

4. Consider applicable late-payment rights

For qualifying UK business-to-business debts, GOV.UK explains statutory interest and fixed debt-recovery compensation. Current guidance states statutory interest is 8% above the Bank of England base rate for relevant B2B transactions, unless a different contractual interest rate applies. Eligibility and calculation should be checked before adding a charge.

Do not automatically add interest to every consumer or business invoice. The legal basis, contract and type of customer matter. Check the current rules or obtain advice if the amount is significant or disputed.

5. Escalate proportionately

Possible next steps can include a formal letter before action, mediation, debt collection or a legal claim. The right route depends on the amount, evidence, relationship and jurisdiction. For larger or contested debts, professional advice can be more valuable than repeated informal chasing.

Prevent the same problem next time

Ask why the payment became difficult. Could you collect a deposit, shorten milestones, obtain a PO before starting, confirm the accounts-payable email or write a clearer scope? Good invoicing cannot eliminate every late payer, but it can remove avoidable friction.

Official reference: GOV.UK – interest on late commercial payments.

Important: This guide is general information, not legal, tax or accounting advice. Rules can change and individual circumstances differ. For UK tax and invoicing requirements, check current GOV.UK/HMRC guidance or speak to a qualified professional.