Best Practices on Chasing Payments

Paola Faben Oliveira

Whether you’re a high-profile business in the UK or a self-employed individual, this entire endeavor of chasing payment is a tightrope to walk. Knowing how to get your payments without losing clients can make this process less awkward. This article covers some insightful info on how to chase payments politely so your business can get paid without harming customer relationships.

If you’re looking for ways to make this process as smooth as possible, don’t forget to check out Wise Business. Its intuitive, low-cost international features make it easier to get customer payments in currencies!

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Why chasing payments is important for businesses?

New research shows that nearly half (49.3%) of invoices sent by UK small businesses last year were paid late. This is an increase from 43% the year before1. Most payments are, on average, delayed by about a week. Late payments cost small businesses an average of £22,000 annually and lead to a total loss of 56 million hours of productivity across the economy2.

If delayed for too long, late payments could create dire financial troubles for businesses. Cashflow is affected, and you can’t pay suppliers, staff, or other company overheads. Not to mention how much time is spent on administration and logistics that could be allotted to business growth activities. In fact, you can’t even forecast correctly as you simply don’t know when you’ll have the cash in your hands.

Preventing your business from the pitfalls means you should be chasing payments after a set period. Note that you’re completely entitled to do it. Just make sure you play your cards right. It isn’t a fun process, yet it needs to happen to manage profits and cashflow.

Thankfully, there are some tried and tested ways to tackle this issue. Scroll more to find out.

When to start chasing payments?

There are some pretty common examples of how some businesses need to have a solid plan in place to chase their payments. Let’s say you own a small marketing agency that completes a project for a client and sends an invoice with a 30-day payment term. The due date has passed, but the payment hasn’t arrived. You’d need to send a polite reminder immediately after the due date. If there’s no response within a week, follow up with a more assertive message or call to ensure the issue is addressed.

Once you’ve confirmed there were no problems or misunderstandings about payment terms or invoice details, and you’ve still not received your payment, it’s time to follow up with the customer/client.

Remember that every business has legal protection in the UK. Unless there are other payment terms, your client has to pay you no more than 30 days after the product or service delivery. And if the invoice becomes overdue, a good rule of thumb is to:

  • Send a reminder on the payment day.
  • Follow up every 10 days after that.

Dealing with an uncomfortable task like chasing payments could take a toll on your business activities. It is always a good idea to set up a reminder schedule based on customers’ payment behavior. If they had a good track record, you could be a little less persistent to preserve your relationship.

woman-working-and-holding-papers

How to chase payments politely - step-by-step

This is a question most businesses fail to decipher the right way – how to chase payments politely?

Let’s walk through some common steps you must take if you are chasing payments as a UK business. Exactly how you do it relies on your payment terms, business type, and the amount owed. Nonetheless, the flow usually goes like this:

Polite reminders for recent invoices

Once your client has stepped into the outstanding invoice zone, you should remind them. Typically, the first reminder goes after 1 or 2 days of the due date. At this point, you should keep the emails or messages polite and subtle. Since it’s been only a couple of days, there might be a misunderstanding or simply an oversight from the customer.

Switch to direct communication

After 10 or 14 days of payment delays, you should consider other communication methods, such as phone calls. Instead of chasing payment letters, a phone call allows a direct conversation that can help get the issue sorted there and then. You can even arrange a meeting with the customer to reach a conclusion faster and modify the payment terms (if needed).

Formal message for long overdue

If it’s been 20 days or more and you still haven’t received your payments, you should send a more formal reminder. Include the payment date and any penalties or interest your business charges in these scenarios. Don’t hesitate to send a list of outstanding amounts to the customers who haven’t paid previous invoices either. This will allow them to see the full amount that they have to pay, and they can plan future orders accordingly.

At this step, discussing a payment extension or a new payment plan is also a good idea if the customer struggles to pay the dues. This reflects your commitment to this relationship and ties the bond tighter!

Final call

This is the stage where you send a final reminder. Outline all the actions you have taken so far and your next plans. When sending the final demand, ensure you adhere to all the UK legislations.

Contact external agencies

If all the internal efforts for chasing payments are in vain, it’s time to outsource the task to a debt collection agency. They specialize in recovering unpaid invoices. Having a professional by your side could help if the customer isn’t responsive. Such steps could negatively impact your relationship with the customer, so consider that before you move ahead. Debt collectors also take their cut (around 25%) of what you owe to the other parties3. Knowing all angles of this stage could help you decide if you’re in a position to involve an external entity.

How to chase international payments?

Chasing international payments requires more than persistence. It asks for cultural sensitivity and strategic planning to ensure timely payments. Besides following the protocols listed above, you should:

  • Include clauses for currency fluctuations and late fees in payment agreements.
  • Understand that bank transfers across borders may take 3-5 business days. Plus, there could be local bank holidays that could cause a delay.
  • Acknowledge that payment delays are common in some cultures.
  • Keep an eye on exchange rates, as there may be discrepancies in amounts received.
  • Research the debtor’s local laws to understand your rights for invoice recovery.

Ideally, all cross-border invoices should have clear payment terms. To make your life and the life of your customer easier you can use a multi-currency account like Wise Business to enable your clients to pay you in currencies, including Euros and US dollars.

This is a great option for your customer paying you in USD, for example, and even better for you when you receive an international payment quickly⁴ and easily.

Once the USD payment reaches your Wise Business account you can convert it to GBP with low-fees and the mid-market exchange rate, or hold the funds in USD and spend this in business travel or software subscriptions using your Wise Business card.

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Chasing payment letters or emails – examples

Although the format of chasing payment letters or emails depends on your relationship with the client, here are some templates that could help you get started:


Template #1

Subject: Payment Due Today – Invoice Number

Dear Client Name,

I hope this email finds you well. This is a quick follow-up regarding invoice Invoice Number, due today. I wanted to check in and ensure everything is on track for the payment.

If the payment has already been processed, could you kindly share the transaction date and any relevant details so I can confirm receipt on my end? If not, please let me know if there are any issues or delays, and I’ll be happy to assist in resolving them.

To assist your team, I’ve re-attached the invoice for reference. Please feel free to reach out if you need any further information.

Thank you for your attention to this matter, and I appreciate your prompt response.

Best regards,

Your Signature


Template #2

Subject: Reminder – Overdue Payment for Invoice Number

Dear client name,

I was recently informed that the Invoice Number payment is still pending. Our team has tried to reach out to you, but they haven’t succeeded in making contact. I understand delays can happen, and I’m here to assist in resolving this as quickly as possible.

We’ve really enjoyed this partnership and hope to stay in touch in the future. If you’re unable to process the payment at this time, please let us know so we can work something out.

Sincerely,

Executive Signature


The structure of each email varies according to the phase of chasing the invoice process. Still, you shouldn’t overlook the importance of staying professional and polite. Maintain a relationship that allows your customers to be open with you. Together you can find a solution instead of breaking down the ties, once and for all. Besides a solid customer relationship, chasing payments politely could also boost your market reputation.

When to take legal action about unpaid invoices?

The exact timeframe of going for legal intervention depends on the customer, your relationship with them, and the amount overdue. Look back at all the steps you’ve taken so far and ask the following:

  • Were you accepting late payments for a while?
  • Are your reminders being ignored?
  • What is your client’s current credit score?

Legal action is usually the last step in financial disputes but is often the last resort if invoices remain unpaid. Many UK businesses spend a lot of time sending payment reminders. Some have tight cash flow and struggle to pay staff and cover monthly bills. Getting the law involved can consume time and money. So, weigh all your options and then go for a legal action if it seems worthwhile.

FAQs - chasing payment

What is the best way to remind clients about overdue payments?

Here is how the reminder flow usually goes:

Polite reminder → Follow-up with payment terms and fees → Consider a call or visit → Final reminder → Involve debt collection or legal action.

What are the most reliable payment methods for UK businesses?

The most reliable payment methods for UK businesses include bank transfers, credit/debit card payments, and non-banking providers like Wise Business. These methods offer security and are widely accepted.

What are my legal rights when a client doesn’t pay on time?

If a client doesn’t pay on time, you can charge interest and late fees, as outlined in your payment terms. You can also send formal reminders and, if necessary, take legal action to recover the debt.

Receive international payments easily with Wise Business

Wise can help UK businesses get paid by customers in multiple currencies, with low fees and the mid-market exchange rate.

wise-business-product

Your Wise Business account comes with local account details to get paid in major foreign currencies like Euros and US Dollars just as easily as you do in Pounds.

All you need to do is pass these account details to your customer, or add them to invoices, and your customer can make a local payment in their preferred currency. You can also use the Wise request payment feature to make it even easier and quicker for customers to pay you.

Remember that making it easier and simpler for your local and international customers to pay your invoices can mean less time chasing payments and, consequently, better cash flow to take your business further.

Get started with Wise Business 🚀


The daunting process of chasing payments could go smoothly or cause some drama, but you must do what you must to save your business from setbacks. Use this guide to keep your UK business from sudden cashflow troubles. Don’t forget to check out Wise Business to make payments an effortless process for your customers.

Sources used in this article:

  1. SME late-payment crisis
  2. Small Businesses Will Benefit From Restrictions on Late Payments, UK Government Says
  3. If a debt is sold to another company do I have to pay (UK)?
  4. Speed: The speed of transaction claim depends on funds availability, approval by Wise's proprietary verification system and systems availability of our partners' banking system, and may not be available for all transactions.

Sources last checked January 28, 2025


*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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