Payment reminders

To optimise your chances of getting paid, it's important to have procedures in place for the recovery of outstanding claims.

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Send a payment reminder once payment is overdue

You should send a reminder letter once payment becomes overdue.

This records the late payment, the amount outstanding, the invoices in respect of the amount and the breach of the credit terms.

You can use the reminder to request payment by return or the customer can reply to the reminder explaining any payment delay.

If the debt remains outstanding after the first letter you should send a Second reminder letter when you think it is reasonable, considering the number of days that you have given the debtor in the first letter to repay the debt.

Claim interest and debt recovery compensation

At each stage, it's up to you whether you claim interest. For more information read our guide to Claiming interest on commercial debts.

You may decide, particularly at the first payment reminder stage, that you would prefer to reserve your position regarding interest than claiming it right now.

You need to balance the need to nurture your continuing relationship with your customer with your need to recover debts.

Our payment reminder letters also reserve your right to claim compensation for debt recovery costs, which you are entitled to do by law for business customers.

You must take certain steps before starting court action

Trying to settle a claim before taking court action is important. The courts may penalise a claimant who doesn't attempt to settle a claim before taking legal action.

Only consider court action if the payment reminders and other measures described above have been unsuccessful in prompting payment.

It is essential to give the customer a final chance to pay before starting legal action.

A court will expect the claimant to have set out a claim in writing before issuing proceedings.

A formal letter before action sets out the debt and gives the other party a reasonable time to reply - a month is usual. The other party should also be warned that court action will be initiated if they fail to reply within the given time.

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Create your Late payment letter

Answer a few questions. We'll take care of the rest