Avoiding late payments from customers – Our Top Tips
MARCH 2026
There has been much support for the UK Government’s decision to introduce tougher rules on late payments, The reforms, led by the Department for Business and Trade (DBT), follow joint research by the department and the Small Business Commissioner indicating that delayed invoice payments drain close to £11bn from the UK economy each year.
The same research suggests that payment delays are a factor in the closure of 38 companies every day, while business owners spend an average of 86 hours annually trying to recover overdue sums.
With this in mind, we have put together a list of tips to help you avoid late payments from customers.
1. Set your terms clearly. If you don’t want to change how you invoice, perhaps look at changing your invoice layout. Are your payment terms clear? Be sure to highlight what a customer needs to pay, when they need to pay it and whether there are any penalties for late payments. Displaying this information obviously on each invoice will help to avoid customers paying late simply because they weren’t sure of the payment deadline, and it will also make any necessary conversations about late payments a little less awkward (you’ll simply be reminding them of your clearly stated terms).
2. Interim Invoicing. Agree to ask for progress payments on bigger pieces of work. We suggest issuing interim invoices monthly, charging for the work done during that period.
3. Shorten your payment terms. Most companies use 30 day payment terms but these are really up to you. Reducing your terms could be an option if you have several customers who repeatedly make late payments.
4. Send out invoices promptly. Making sure you invoice immediately – and accurately – can help to ensure you are paid on time. Sounds obvious, but too often we see that late payments arise from late invoices.
5. Make payment easy. Ask yourself (or ask your customers!) if payments can be made in a way that suits them (not necessarily you). Consider offering more ways to pay, and always include all payment options and details in relevant correspondence.
6. Communicate. Good communication with your customers is key to avoiding late payments. Speaking to them may uncover a solvable problem, or (as is more often the case) a simple reminder to jog their memory may be needed and appreciated. A personal call is always best, but in addition automated reminder emails could save you time and effort.
7. Put clients on hold if they don’t pay. Kevin Thompson, Client Partner, adds “There may be occasions when this is necessary. If your full reminder process has taken place to no effect, don’t be afraid to take this step.”
Please call us for further advice on 01642 606003.