December has a way of exposing cash flow gaps. Wages, suppliers and tax bills don’t pause for the festive season, but customer payments often do, as accounts teams wind down and invoices sit unprocessed. For construction firms and recruitment agencies especially, a few overdue invoices can put real pressure on the bank balance. As Basildon accountants who see this pattern every year, here’s how to get paid sooner.
Start before the invoice is overdue
Good chasing starts with good invoicing. Send invoices promptly, include clear payment terms and purchase order numbers, and make sure the details are correct so nobody has an excuse to query them. A friendly reminder a few days before the due date works well. It’s also worth asking larger customers when their final payment run falls before Christmas, because many finance teams close their books in mid-December.
Follow a simple chasing routine
Consistency beats aggression. Send a polite email the day after an invoice becomes overdue, then follow up by phone with a named contact within a week. If that doesn’t work, send a formal letter that sets out your payment terms and your legal rights. Keep a record of every contact, because it will matter if the matter escalates.
Know your legal rights
Under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business invoices can attract interest at 8% above the Bank of England base rate. You can also claim fixed compensation per invoice: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99 and £100 for £10,000 or more. These rights apply automatically, even if your contract doesn’t mention them. Parliament is also considering new legislation to tighten late payment rules, but the protections above are available now.
Protect your cash flow while you wait
An aged debtors report from your bookkeeping software shows exactly who owes you what and for how long, so you can focus on the largest and oldest invoices first. For slow payers, consider deposits, stage payments or shorter terms on future work. Our cash flow and bookkeeping support helps businesses build these routines so late payers are spotted early rather than in January.
Know when to escalate
If a formal letter doesn’t produce payment, the next steps might include a letter before action or recovery proceedings. This is where taking advice early pays off, as the wrong move can damage a relationship you’d like to keep. If you’d like to know more about who we are and how we support SMEs across Essex, take a look at our team.
Don’t let unpaid invoices spoil Christmas
If overdue invoices are causing you stress, get in touch and we’ll help you tighten your credit control before the year ends.