How to chase a large client who is chronically late paying

Dealing with a large client who consistently pays late is one of the most stressful situations a small business owner can face. This single client might represent a huge chunk of your revenue, but their slow payment habits can cripple your cash flow and leave you feeling powerless. You need their business, but you also need them to pay their bills on time. This leverage imbalance is a real and difficult challenge.

This article provides a practical, structured guide for UK businesses on how to manage this situation. We'll move from preventative measures and polite chasing to understanding your legal rights and making the tough commercial decisions. This isn't about sending angry emails; it's about implementing a professional process to get the money you're owed while protecting the client relationship where possible.

First, Diagnose the Problem: Why Are They Really Paying Late?

Before you can fix the problem, you need to understand the root cause. It's rarely as simple as "they don't want to pay you." In large organisations, the reasons for late payment are often systemic rather than malicious.

Common Culprits in a Large Company's Accounts Payable Process

• Complex Bureaucracy: The most common reason. A large company may have a multi-stage process for approving and paying an invoice. It might need to be signed off by your day-to-day contact, then coded by a department manager, then processed by the accounts payable (AP) team, and finally scheduled in a weekly or bi-monthly payment run. Your single invoice is a tiny cog in a massive machine. A delay at any stage shunts it to the next payment run, often 1-2 weeks later.
• "No PO, No Pay": Many large businesses operate a strict Purchase Order (PO) system. If you haven't received a PO number before starting the work and included it clearly on your invoice, the AP department will simply reject it or put it in a query pile. They will not chase you for it; the onus is on you to get it right.
• Incorrect Submission: Did you email the invoice to your friendly contact in the marketing team? They may have forgotten to forward it to accounts@largecorp.co.uk, or it got lost in their inbox. Large companies have dedicated channels for invoices, and using the wrong one is a guaranteed way to get paid late.
• Deliberate Cash Flow Management: Some large companies, even highly profitable ones, deliberately use their smaller suppliers as a free credit line. They will stretch payment terms from 30 days to 60 or 90, knowing that you are too small to fight back effectively. They are financing their operations with your money.
• Disorganisation: Sometimes it's simple human error or a chaotic internal system. Your contact is overworked, the AP team is understaffed, or their accounting software is archaic. While not malicious, the result for your bank account is the same.

Your first step is to politely investigate. Don't open with an accusation. Instead, frame your query as a helpful check: "Hi [Contact Name], I'm just calling to confirm you have everything you need for invoice #12345. We sent it to [email address] on [date] and just want to ensure it's in your system correctly for the payment run." This approach often reveals the bottleneck without creating conflict.

The Pre-emptive Strike: Getting Your Process Right

The best way to chase an invoice is to make it incredibly easy to pay in the first place. Before you even think about chasing, you must ensure your own processes are watertight. Any mistake on your end gives the client a legitimate excuse for delay.

Invoice and Contract Hygiene

1. Clarify Payment Terms Upfront: Don't just assume "30 days." Get the payment terms in writing in your contract or proposal. For a large client you know is slow, you could try to negotiate shorter terms (e.g., 14 days), but this is often difficult. More importantly, ensure your contract explicitly states that you reserve the right to charge interest and compensation on late payments under UK law.
2. Confirm the Process: Before you send your first invoice, ask your contact:
   • "What is the correct email address or portal for invoice submission?"
   • "Do I need a Purchase Order number for every invoice?"
   • "Who is the best person to contact in your accounts team if I have a query?"
   • "What are your standard payment run dates?" (e.g., "We pay all invoices on the 15th and 30th of the month"). Knowing this helps you manage your own expectations.
3. Create the Perfect Invoice: Your invoice should be impossible to query. It must include:
   • Your full company name, address, and contact details.
   • Your company registration number and VAT number (if applicable).
   • The client's full legal entity name and address.
   • A unique invoice number.
   • The invoice date and the payment due date.
   • The agreed Purchase Order (PO) number, displayed prominently.
   • A clear and detailed description of the goods or services provided.
   • A clear breakdown of costs, including sub-totals, VAT, and the final total.
   • Your bank details for payment (sort code and account number).

Sending a clear, correct invoice to the right place and with the right PO number eliminates over 50% of the common reasons for late payment by large companies.

The Escalation Ladder: A Professional Chasing Sequence

When an invoice does become overdue, you need a structured, professional process. Firing off random, emotional emails won't work. Here is a step-by-step ladder of escalation.

Step 1: The Automated, Polite Reminder (1-3 Days Overdue)

The moment an invoice passes its due date, a reminder should be sent. The tone should be light and friendly, assuming it's a simple oversight.

Subject: Friendly Reminder: Invoice #12345

Body: Hi team, Just a gentle reminder that invoice #12345 for £X,XXX was due for payment on [Due Date]. A copy is attached for your convenience. Could you please let us know when we can expect to receive payment? Many thanks, [Your Name]

This initial step is purely administrative. It's the perfect task for automation. Instead of you having to manually track due dates and send these emails, a tool like InvoiceReminder can do it for you. It connects to your accounting software (like Xero, QuickBooks, Sage, or FreeAgent) and automatically sends out these pre-written reminders according to a schedule you set. This frees up your time to focus on the more difficult cases that require a human touch.

Step 2: The Firm Follow-Up (7-10 Days Overdue)

If the first reminder is ignored, the tone becomes more direct, but still professional. The goal is to get a specific payment date.

Subject: Overdue Invoice #12345

Body: Hi team, Following up on my previous email, invoice #12345 for £X,XXX is now 10 days overdue. Prompt payment would be greatly appreciated. Could you please provide an update and confirm a date for payment? The original invoice is attached again for your reference. Best regards, [Your Name]

Step 3: Pick Up the Phone (14+ Days Overdue)

Emails are easy to delete or ignore. A phone call is harder to dismiss. This is often the most effective step.

• Call the Right Person: Don't just call your day-to-day contact. They are likely sympathetic but powerless. You need to speak to someone in the Accounts Payable department. Use the contact details you gathered at the start of the project.
• Be Prepared: Have the invoice number, date, and amount ready.
• Be Calm and Professional: "Hello, my name is [Your Name] from [Your Company]. I'm calling about invoice #12345, which is now overdue. I was hoping you could check its status for me."
• Get a Commitment: Don't end the call with a vague "we'll look into it." Ask for a specific action. "So, you've found the invoice and it's been approved. Can you confirm which payment run it will be included in?" or "Could you confirm the exact date the payment will be sent?"
• Follow Up in Writing: Immediately after the call, send an email summarising the conversation. "Hi [AP Contact's Name], thanks for your time on the phone. As discussed, you have confirmed that invoice #12345 will be paid on or before [Date]. We look forward to receiving it." This creates a written record of their promise.

Step 4: Escalate to a Senior Contact (21+ Days Overdue)

If the AP team is unhelpful or the promised payment doesn't arrive, it's time to escalate. This requires careful handling due to the leverage imbalance. Go back to your original, more senior contact who commissioned the work (e.g., a Head of Department or Director).

Frame it not as an angry complaint, but as a request for help with a process issue.

Subject: Help needed regarding invoice #12345

Body: Hi [Senior Contact Name], Hope you're well. I'm writing as we're having some difficulty getting an update on the payment for invoice #12345 (£X,XXX), which is now more than three weeks overdue. We've been in touch with your AP team but haven't been able to get a firm payment date. I was wondering if you might be able to point me in the right direction or perhaps give the right person a nudge internally? We'd really appreciate your help in getting this sorted. Many thanks, [Your Name]

This approach respects their seniority, positions them as a problem-solver, and is less confrontational than a direct demand for money. A senior manager can often unblock a stuck invoice with a single internal email.

Wielding the Stick: Using Your Statutory Rights

If the polite and professional approach fails, you have legal rights under UK law. Using them is a serious step that can damage the relationship, so you must be prepared for that outcome. This is the final resort before considering legal action.

The key piece of legislation is the Late Payment of Commercial Debts (Interest) Act 1998. This applies to business-to-business transactions and gives you a statutory right to claim interest and compensation for late payments, even if it's not mentioned in your contract.

What You Can Claim

1. Statutory Interest: This is calculated at 8% plus the Bank of England's base rate. For example, if the base rate is 5.25%, you can charge 13.25% interest on the outstanding amount. The interest is calculated daily.
2. Fixed Compensation: You can also claim a one-off compensation payment for each late invoice. The amount depends on the size of the debt.

Debt Value (per invoice)	Compensation You Can Claim
Up to £999.99	£40
£1,000 to £9,999.99	£70
£10,000 or more	£100

How to Use This Right

You don't just add this to your next invoice. You must formally notify the client. This is usually done via a firm letter or email, sometimes called a "Final Notice."

Subject: Final Notice Before Action: Overdue Invoice #12345

Body: Dear Accounts Payable, Invoice #12345 for £X,XXX remains unpaid, despite our previous reminders. It is now [Number] days overdue. Please be advised that we are now exercising our statutory right to claim interest and compensation for this late payment under the Late Payment of Commercial Debts (Interest) Act 1998. The interest currently stands at £[Amount] and is accruing at a daily rate of £[Amount]. We are also applying a fixed compensation charge of £[40/70/100]. If full payment of the original invoice amount (£X,XXX) is not received within 7 calendar days, we will issue a new invoice for the outstanding principal plus all accrued interest and compensation charges. Failure to settle this will result in us commencing legal action to recover the full debt without further notice.

This is a powerful tool. The mere mention of the Act and the threat of a larger bill is often enough to get a large company's attention and push your invoice to the top of the pile.

The Long-Term Commercial Decision: Is This Client Worth It?

Once you (hopefully) get paid, you need to step back and assess the situation strategically. A client who pays on 90 days instead of 30 is effectively reducing your profit margin.

• Calculate the True Cost: How many hours did you and your team spend chasing? What was the mental toll? Did you have to delay paying your own staff or suppliers? Did you have to use an overdraft, incurring interest charges? This "soft cost" is very real.
• Renegotiate for the Future: Before starting the next project, try to change the terms.
  • Upfront Payments: "For all new projects, our policy is now 50% payment upfront and 50% on completion." This guarantees at least some cash flow.
  • Milestone Payments: For long projects, break the work into phases with a payment due upon completion of each phase.
• 'Stop Work' Clause: Ensure your contract includes a clause that allows you to suspend all services if an invoice becomes more than a certain number of days overdue (e.g., 30 days). This is your strongest piece of leverage, as it directly impacts the client's operations.
• Diversify Your Client Base: The ultimate solution to a leverage imbalance is to correct it. Your goal should be to grow your business so that no single client makes up a dangerous percentage of your revenue. This takes time, but it's the only way to truly be in control.

Chasing a large client is a delicate balancing act between maintaining a vital relationship and enforcing your right to be paid. By implementing a clear, professional, and escalating process, you maximise your chances of getting paid promptly while minimising conflict.

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Stop Chasing, Start Automating

Manually tracking invoices and sending reminders is time-consuming and prone to error, especially when you're busy running your business. A systematic approach is key. InvoiceReminder automates the email chasing process, sending polite, persistent reminders for your overdue invoices directly from your own email address. It connects with Xero, FreeAgent, Sage, and QuickBooks to save you from the administrative headache of credit control. For UK accountants, freelancers, and small businesses who want to get paid faster without the manual effort, it’s a simple way to professionalise your collections process. The Free plan currently includes unlimited email reminders at no cost. InvoiceReminder is built by the team behind WeCovr, a UK company authorised and regulated by the Financial Conduct Authority for its insurance activities.

Frequently asked questions

Can I legally charge interest on a late invoice in the UK?

Yes. For business-to-business transactions, the Late Payment of Commercial Debts (Interest) Act 1998 gives you a statutory right to claim interest (at 8% over the Bank of England base rate) and a fixed compensation sum on overdue invoices. This applies even if it wasn't mentioned in your original contract.

My invoice doesn't mention late payment charges. Can I still add them?

Yes, you can. The right to claim statutory interest and compensation for B2B debts is granted by UK law. You don't need to have pre-warned the client on the invoice itself, although it is good practice to mention this in your standard terms and conditions. You must, however, formally notify them of your intent to apply these charges before adding them to the debt.

What's the first thing I should do when a big client is late paying?

Before assuming the worst, perform a quick admin check. Confirm that your invoice was 100% correct, included a valid Purchase Order (PO) number if required, and was sent to the correct person or department (e.g., the dedicated accounts payable email address, not your day-to-day contact). Many payment delays with large companies are caused by simple submission errors.

Will chasing a large client for payment damage our relationship?

It's a valid concern, but the risk can be managed. A professional, structured, and polite chasing process is unlikely to cause offence; it simply shows you are organised. The relationship is a two-way street. Consistent late payment from their side is also damaging the relationship by causing you financial stress. A client who values your service should respect your need to be paid on time.

How much compensation can I claim for a late payment in the UK?

In addition to statutory interest, you can claim a one-off fixed sum as compensation for each late invoice. The amount is set by law and depends on the invoice value: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more.

What if there's no written contract for the work?

Even without a formal written contract, if you have provided goods or services to another business and they have accepted them, a contract is deemed to exist. The Late Payment of Commercial Debts (Interest) Act 1998 will still apply, and you have the right to chase for payment and claim statutory interest. However, always getting terms in writing is by far the best practice.