What happens if a client doesn’t pay – what are your options?

When you’re self-employed, not getting paid on time can add a huge amount of stress to running your business.

Unlike bigger businesses, you probably don’t have a cash buffer or finance team to chase things up – everything relies on you.

So if a client stops responding to your emails or flat-out refuses to pay, what can you do?

In this guide, we explain the steps you can take if a client doesn’t pay, the legal options you can pursue, and how to reduce the chance of experiencing late payers in the first place.

1. Check the basics first

Go back and double-check the initial invoice. Is it accurate? Was it sent to the right person? Does it clearly state the amount due, the payment deadline, and contain your bank details?

If the client has a formal process for dealing with invoices, such as providing a PO Number or using an invoice portal, make sure you follow the instructions. Larger companies in particular may automatically reject invoices if they’re not submitted correctly.

You can also check if they pay on fixed cycles (such as end-of-month batches), which may cause delays even if you did everything else correctly.

2. Chase professionally (but persistently)

Once the payment deadline has passed, send a polite, professional reminder.

Don’t be afraid to follow up regularly. Here is a suggested sequence to follow.

• Day 1 after due date: Send a friendly reminder email.
• Day 7: Follow-up and re-attach the invoice,
• Day 14+: Make a phone call and a more direct email.

Always make it easier for the client to pay. Include the email again, and make sure your payment details are clearly displayed.

Also, check your spam or junk folder for any automated replies or remittance advice that you may have missed.

3. Add late payment interest

You’re legally allowed to charge interest on overdue invoices under the Late Payment of Commercial Debts (Interest) Act.

Most small businesses may be reluctant to do this, but it is an available option should you encounter a persistent late payer.

The standard rate is 8% above the Bank of England base rate, plus a fixed fee (£40, £70 or £100 depending on invoice size).

You don’t need to state this on your invoices, but it is your statutory right.

If you mention this later in your follow-up communications, it can sometimes motivate a client to pay quickly.

4. Send a final warning

If you’ve chased a few times and still heard nothing, you can send a formal letter before action.

This is your final notice before escalating to legal action. And it doesn’t need to be written by a solicitor.

It should state the total amount due, any interest or late fees you’re claiming, and the payment deadline (usually 7–14 days). You can also warn that you’ll begin legal proceedings if it remains unpaid.

See template wording at: Rocket Lawyer – Letter Before Action templates

5. Consider taking legal action or small claims

If you’ve exhausted all the options we’ve described above, you can escalate the matter formally.

For unpaid invoices under £10,000, you can usually make a claim through the Money Claim Online service (the modern version of the small claims court). The process is designed to be used without a solicitor.

There’s a fee to submit a claim (which is based on the amount owed), but this can be added to your claim.

If your claim is successful, you’ll get a County Court Judgment (CCJ) that should force the client to pay up. If they don’t, this could affect their credit record.

Many clients settle outstanding payments at this stage, as the consequences for not doing so can be severe.

You can find out more at: GOV.UK – Make a court claim for money

6. Use a debt recovery service

If you don’t want to go through the legal process yourself, you can use a debt collection agency.

Some work on a ‘no win, no fee’ basis, whereas others charge a percentage of what they recover.

Make sure they’re regulated by the Financial Conduct Authority.

We’ve explained how to choose one and what to expect during the debt collection process in our guide to using a debt recovery service.

Debt collection agencies vary in their approach. Some are fairly diplomatic, whereas others are ‘forceful’; choose one that matches the tone you want to set.

And always keep in mind: just the threat of a professional collector is often enough to prompt payment. We’ve used this process before at ByteStart, and each time we have received late funds within a few days.

7. Learn from the experience, and protect yourself in future

Most businesses experience late payments at some stage – it’s an unavoidable part of running a business.

But if it keeps happening, there may be things you can improve within your business.

Here are some steps to take to reduce the risk of non-payment or late payment:

To reduce the risk of non-payment:

• Ask for part-payment upfront (especially useful for new clients).
• Use professional written contracts with clear terms and conditions.
• Shorten your payment terms if needed (e.g. 7 or 14 days).
• Include a late payment clause – even if you never enforce it.
• Consider using payment platforms or deposits for high-risk clients

Minimise the chances of getting paid late

Late payments – and the effects they can have on cashflow – are one of the most frustrating parts of being self-employed.

But even if it sometimes feels that way, you’re not powerless. The law’s on your side, and as this guide shows, there are clear steps you can take to reduce the chance of suffering late payment problems.

And if someone’s a repeat offender? Don’t be afraid to walk away. Not all clients are worth it.