Free, no sign-up. The wording, chase emails and figures I use to get small engineering and manufacturing firms paid faster. Copy them into your own quotes, invoices and email.
- What late payers cost you
- Payment terms and the law
- Payment terms wording
- The chase sequence
- Stop it happening in the first place
What late payers cost you
Take your annual sales, divide by 365, and multiply by the number of days your customers pay later than your terms. That is the cash your customers are holding instead of you.
| Annual sales | Customers pay | Cash held by your customers |
|---|---|---|
| £2m | 15 days late | £82,000 |
| £4m | 20 days late | £219,000 |
| £6m | 25 days late | £411,000 |
That is cash you can’t use for stock, wages or growth. Chasing earlier frees it up without asking anyone else for money.
Payment terms and the law
If you haven’t agreed a payment date with a business customer, UK law treats payment as late 30 days after they get the invoice or you deliver, whichever is later. Agreed terms between businesses should usually be no longer than 60 days.
Your strongest tools are not legal ones. They are clear terms agreed before the work starts, a due date on every invoice, a chase that happens on the same days every time, and the willingness to pause work for customers who don’t pay.
Payment terms wording
Put this on every quote, order acknowledgement and invoice. Terms that only appear on the invoice are the easiest to argue with.
On quotes and order acknowledgements
Payment terms: 30 days from the date of invoice. [For orders over £X: 30% on order, the balance on delivery.] Further work and deliveries may be put on hold on any account more than 14 days overdue.
On invoices
Payment due by [date]: 30 days from the date of this invoice. Please quote invoice [number] with your payment. Further work and deliveries may be put on hold on overdue accounts.
Put a due date on the invoice, not just “30 days”. A date gets paid; a number of days gets calculated, by the customer, generously.
The chase sequence
Same steps, same days, every invoice. Most late payment is not refusal; it is your invoice sitting at the bottom of someone’s pile.
| When | What | Who |
|---|---|---|
| 3 days before due | Friendly reminder email with the invoice attached | Accounts |
| 7 days overdue | Firm email asking for a payment date | Accounts |
| 14 days overdue | Phone call, then an email confirming what was promised | Accounts, or you for big customers |
| 30 days overdue | Formal letter with a 7-day deadline and a clear consequence | You |
| After the deadline | Stop further work or deliveries; consider the small claims court or a collection agency | You |
Email 1: 3 days before due
Subject: Invoice [number] due on [date]
Hi [name], a quick note that invoice [number] for £[amount] is due on [date]. A copy is attached. If anything on it needs correcting, let me know this week so it doesn’t hold up payment. Thanks, [your name]
Email 2: 7 days overdue
Subject: Invoice [number] is now overdue
Hi [name], invoice [number] for £[amount] was due on [date] and we haven’t received payment. Can you tell me the date it will be paid? If there is a problem with the invoice, tell me and I’ll sort it today. Our bank details are [details]. Thanks, [your name]
Email 3: 14 days overdue, after the phone call
Subject: Invoice [number]: payment on [promised date]
Hi [name], thanks for speaking to me today. As agreed, invoice [number] for £[amount] will be paid on [promised date]. I’ll check our account that day. Thanks, [your name]
Letter 4: 30 days overdue
Subject: Overdue account: invoice [number]
Dear [name], invoice [number] for £[amount] is now 30 days overdue, despite our reminders on [dates].
Please make payment by [date: 7 days from now]. If we have not received it by then, we will put all further work and deliveries on hold until the account is settled, and may pass the debt to a collection agency.
Yours sincerely, [your name]
A dated deadline with a real consequence gets paid; a vague request to “pay soon” gets filed. Use your judgement with your best customers, but don’t let one customer’s habit set your cash flow.
Stop it happening in the first place
- Invoice the day the job is finished. Every day between completion and invoice is a day added to how long you wait for cash.
- Take deposits or stage payments on large or long jobs, and on materials you buy in specially.
- Check new customers before giving credit: a credit check costs a few pounds; a bad debt costs the margin on ten jobs.
- Set a credit limit for each customer, and stop work when an account goes over it or past 60 days.
- Automate the reminders. Most accounts packages, including Xero, QuickBooks and Sage, can send reminder emails automatically, so nobody has to remember.
This is general guidance, not legal advice. Check your own contracts before stopping work.
Want it set up for you?
I can put this sequence into your accounts system so reminders go out on their own, invoices go out the day a job is finished, and you see who owes what every week. It’s usually the quick win in Foresight.
