Chasing late payments: what actually works for UK trade firms
Late payment is usually drift, not malice. The invoice went out days after the job, landed in the wrong inbox, and nobody chased it. The fix is a boring system: invoice the day the job finishes, remind before the due date, then chase on a schedule. Set it up once so it runs every time.
Why trades get paid late
Builders' merchants get paid on time because they invoice the moment goods leave the yard and chase the moment an account slips. A small firm that invoices three days after the job, from the van, with no reminder system, ends up at the bottom of every customer's pile. The work was fine. The process was quiet.
Every UK survey of small business cash flow finds the same pattern. The firms that get paid fastest are not the ones with the scariest letters. They are the ones whose invoice arrives the same day as the finished job, and whose reminders turn up on schedule.
The sequence that works
Invoice on completion, from site, before you drive off. Three days before the due date, send a short note to check it arrived. On the due date, a reminder with the payment link. A week over, a firmer note that mentions the interest you can charge under the Late Payment of Commercial Debts Act. You will rarely claim it, but naming it moves you up the pile. Two weeks over, pick up the phone.
Two rules keep the relationship safe. Keep every message polite enough that you would happily read it aloud to the customer on site. And run the sequence on every invoice, not just the big ones. When it happens every time, it reads as how the firm works, not as a personal dig.
Set it up so it runs without you
The sequence fails when it depends on a tired owner remembering it at nine at night. Use the reminder settings in your accounting software, a spreadsheet with alarms, or a service that runs the whole back office for you. The test is simple: does the reminder go out when you are too busy to think about it? If not, you have a good intention, not a system.
Count the hours you spent chasing money last month and multiply them by your hourly rate. Put that number next to the cost of automating the chase or handing it to someone else. For most firms past three or four staff it is not a close call.
// from fulcrum
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