Unpaid Invoice? What to Do, Step by Step

An invoice goes past its due date. Now what? The worst responses are doing nothing for two months and then sending an angry email. The best is a plan you follow every time, so it never feels personal and never drifts.

First, check the boring stuff

Before you chase, spend two minutes confirming the problem is on their side:

• Did the invoice go to the right person or accounts payable address?
• Did it include their PO number, if they use them?
• Are your bank details correct and complete?
• Is the due date actually past? Net 30 from the invoice date, not the date you finished the work.
• Has the payment arrived under a different reference? Check your bank.

A surprising share of "late" invoices are sitting in someone's inbox waiting for a PO number.

The escalation timeline

Here's a sequence that works for most freelancers and small businesses. Adjust the timing to your terms.

When	What	Tone
3 days before due	Optional heads-up	"Just a reminder that INV-0148 is due Friday."
1 day after due	First reminder, invoice attached	Friendly, assumes an oversight
7 days late	Second reminder	Clear, restates amount and date
14 days late	Phone call + email	Direct, asks when payment will be made
21–30 days late	Pause work; final notice	Firm, sets a deadline and consequence
30+ days late	Late fees, demand letter	Formal
45–60+ days late	Collections or small claims	Formal, legal

You'll find ready-to-send wording for each step in payment reminder email templates.

Step 1: A friendly reminder

Keep it short, attach the invoice again, and make paying easy. Don't apologize for asking.

Hi Sam, a quick reminder that invoice INV-0148 for $2,400 was due yesterday (15 September). I've attached it again. Bank details are on page one, or you can pay by card here: [link]. Thanks!

Step 2: Firmer, still polite

A week later, restate the facts and ask for a date.

Hi Sam, following up on INV-0148 ($2,400, due 15 September), which is now a week overdue. Could you let me know when it's scheduled for payment?

Step 3: Pick up the phone

Email is easy to ignore. A two-minute call to your contact or their accounts team often gets an immediate answer: "It's in the next payment run" or "We never got it." Follow up the call with an email summarizing what was agreed.

Step 4: Pause work and set a deadline

If you're still working for them, it's reasonable to pause until the account is current. Say so plainly, without drama:

As INV-0148 is now 21 days overdue, I'm pausing further work on the project until it's settled. If payment can be made by 10 October, I'm happy to pick up straight away.

Step 5: Late fees and interest

If your terms mentioned late fees, now is when you apply them. In the UK, businesses can claim statutory interest at 8% above the Bank of England base rate plus fixed compensation on overdue B2B invoices, even if the contract didn't mention it. In the US, what you can charge depends on your agreement and state law. See late fees on invoices.

Step 6: A formal demand letter

A letter (sent by email and post) that states the amount owed, the invoices it covers, any interest, a final deadline (usually 7–14 days), and what you'll do next. It's also typically a required first step before court. Many people pay at this stage simply because the tone has changed.

Step 7: Collections or court

If the demand letter goes unanswered:

• Collection agencies take a percentage of what they recover, often 25–50% for small debts. Worth it for larger amounts you'd otherwise write off.
• Small claims court handles smaller amounts without a lawyer. Limits vary a lot by state and country. See small claims for unpaid invoices.
• Money claim online (UK) is the online route for claims in England and Wales.

Weigh the cost and time against the amount. For small sums, sometimes the right move is writing it off, claiming it as bad debt for tax purposes where allowed, and not working with that client again.

What to keep, from day one

If this ever ends up in front of a judge, you'll want:

• The agreement or quote they accepted (even an email "yes, go ahead")
• The invoice, and proof you sent it
• Every reminder, with dates
• Notes of phone calls
• Evidence the work was delivered

Preventing the next one

• Take deposits from new clients.
• Invoice the day work is delivered.
• Put late payment terms on every invoice.
• Use shorter terms for smaller clients.
• Check payment history with repeat clients before starting new work.