LATE PAYMENT LETTER — CHASING A B2B CUSTOMER ============================================= For UK B2B debts where the customer is past terms. Three escalation levels: friendly (≤14 days late), formal (15–45 days), final notice (46+ days, before instructing solicitor / claiming statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998). Replace the bracketed sections, send on company letterhead, send by both email and post for levels 2 and 3. ========================================================================== LEVEL 1 — FRIENDLY REMINDER (1–14 DAYS PAST DUE) ========================================================================== Subject: Quick reminder — invoice [number] Hi [first name], Hope you're well. Just a quick note that invoice [number] for [£amount] (issued [date], due [date]) hasn't yet hit our account. It's likely just sitting in your payment run, but flagging in case it's slipped through. The reference is [your invoice reference] and our bank details are on the invoice attached again here for ease. If anything is holding it up at your end let me know and we can sort it. Thanks, [Name] [Position] [Company] [Direct line] ========================================================================== LEVEL 2 — FORMAL REQUEST (15–45 DAYS PAST DUE) ========================================================================== [Your letterhead] [Date] [Customer company] [Address] For the attention of: [Accounts Payable / Finance Director / named contact] Reference: Invoice [number] — [£amount] — issued [date] Dear [Title and surname / "Sirs"] I am writing regarding the above invoice, which is now [number] days past its due date of [date]. Invoice number: [number] Original amount: £[figure] Issue date: [date] Due date: [date] Days overdue: [number] Outstanding: £[figure] We have not received payment and our previous reminder dated [date] has not been responded to. I would be grateful for payment within 7 days of the date of this letter. Bank details: Account name: [your account name] Sort code: [xx-xx-xx] Account number: [xxxxxxxx] Reference: [your invoice number] If there is a query on the invoice please contact me on [number] or [email] within the same period. Otherwise please confirm a payment date. If we do not hear from you we reserve the right to: • Charge statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 at 8% above the Bank of England base rate from the original due date. • Charge a fixed sum compensation under section 5A of that Act (£40 for debts under £1,000; £70 for £1,000–£9,999.99; £100 for £10,000 and above). • Put the account on stop and decline further work until the position is resolved. Yours faithfully [Name] [Position] ========================================================================== LEVEL 3 — FINAL NOTICE (46+ DAYS PAST DUE) ========================================================================== [Your letterhead] [Date] SENT BY EMAIL AND POST [Customer company] [Director(s) name(s)] [Registered office] FINAL DEMAND BEFORE LEGAL ACTION Reference: Invoice [number] — [£amount + accrued interest] Dear [Title and surname / "Directors"] I write further to my letter dated [date], which has not been responded to. The following amount is now outstanding and has been overdue for [days] days: Original invoice value: £[figure] Statutory interest at [base+8]% from [date]: £[figure] Statutory compensation per section 5A: £[40 / 70 / 100] --------------------------------------------------------- Total now demanded: £[figure] Unless full payment is received in cleared funds within 7 calendar days of the date of this letter, we will without further notice: 1. Issue a claim in the County Court for the full sum together with court fees and any further accrued interest; 2. If the company does not respond to that claim, apply for judgement in default; and 3. Where appropriate enforce that judgement by High Court Enforcement, attachment of earnings against directors under any personal guarantee, or winding-up petition where the debt exceeds £750. We would prefer to resolve this without escalation. If the company is unable to pay in full now, contact us within the 7-day window to discuss a structured settlement. We will consider any reasonable proposal made in writing. Yours faithfully [Name] [Position] cc: [Director(s) of customer at home address — for cases where you have grounds to suspect the company is failing and want to put directors on notice in a personal capacity] -------------------------------------------------------------------------- NOTES ON USE 1. Statutory interest and compensation under the 1998 Act apply to commercial debts (B2B) automatically — you do not need to put them in your terms. You can claim them retrospectively. Calculator: https://www.gov.uk/late-commercial-payments-interest-debt-recovery 2. Don't threaten action you won't take. Once you've sent a final notice, follow through within the timescale or you lose credibility on the next debt. Issuing a Money Claim Online claim costs from £35. 3. A winding-up petition is not a debt collection tool — it is a request that the court winds the company up. Use only when the debt is undisputed, exceeds £750, and the customer is genuinely unable to pay. A statutory demand (form 4.1) is the preliminary step; expect cost of around £400 to issue if instructing a solicitor. 4. For invoices where the customer is your largest concentration, consider the relationship cost before sending a Level 3 letter. A phone call from the MD to their MD often beats a final demand. 5. Keep file copies of everything. Print proof of postage. Email read receipts. Date everything.