Most overdue invoices are paid because somebody finally sent a letter that sounded like the next step was court. Fill this in and you get one, with the statutory interest and compensation already calculated.
A name gets paid faster than a department.
If you are writing this letter, the money you needed has already been late for weeks. Invoice finance releases up to 90% of an invoice within 24 hours of raising it, so the next one does not turn into this one.
Compare invoice finance lendersFour things: the exact sum, the exact date it fell due, the legal basis on which you are entitled to more than the sum, and a deadline with a stated consequence. A letter missing any of those reads as another chase and goes to the bottom of the pile. A letter with all four gets escalated inside the customer's finance team, which is the only outcome that matters.
Keep it short and keep the emotion out. The person reading it did not decide to pay you late; they are processing a queue. Give them the reference numbers they need to push yours up it.
A letter before action is a genuine commitment. If the deadline passes and you do nothing, you have taught the customer that your deadlines are decorative and every future chase is weaker for it. Only send it if you are willing to issue a claim.
Note also that the Pre-Action Protocol for Debt Claims applies where the debtor is an individual, including a sole trader - it requires a specific information sheet and a 30-day response window. Where you are a company chasing another limited company, that protocol does not apply, but the general Practice Direction on pre-action conduct still does, and courts expect you to have given a reasonable opportunity to pay.
Statutory interest at 8% above the Bank of England base rate in force when the debt became overdue, plus fixed compensation of £40, £70 or £100 depending on the size of the debt, plus your reasonable costs of recovery above that fixed sum. All of it applies automatically under the Late Payment of Commercial Debts (Interest) Act 1998, whether or not your contract mentions it.
You can also work the numbers on their own with the late payment interest calculator.
