Guide · For trades firms
Late payment and chasing invoices: what does it cost a UK trades firm?
138 hours a year on the phone about money you have already earned. Here is what late payment really costs, when to chase, and how to chase without falling out with the customer.
The short answer
The biggest cost is the time you spend asking for it.
A small firm of 10 to 49 people spends 138 hours a year chasing money it has already earned, worth about £2,337. That is roughly three and a half working weeks, and staff time is the single largest late-payment cost at business level, ahead of debt collection, legal costs and finance costs.
Late payment costs the UK economy almost £11 billion a year, but inside a small firm the cost is not interest or legal fees. It is people, ringing people. Those figures come from the government's own research. Here is the detail, when to chase, and how to do it without falling out with anyone.
The size of it
How much is late payment costing small firms?
Across the whole economy it runs to almost £11 billion a year, about 0.4% of GDP. (Department for Business and Trade and the Small Business Commissioner, July 2025)
On any given day:
- £26 billion is owed in late payments.
- That averages £17,000 per affected business.
- Over 1.5 million businesses, 28% of all of them, are affected each year.
- 14,000 businesses close each year because of it, about 38 a day. That is the government's central estimate and the published range is wide, roughly 2,000 to 27,000, so take it as an official best guess rather than a headcount.
The cost nobody puts a number on
How long do you spend chasing invoices?
86 hours a year for the average affected business. Across the UK that adds up to 133 million hours. For a firm your size:
| Size of firm | Hours a year chasing | Cost of that time |
|---|---|---|
| Small (10 to 49 people) | 138 hours | £2,337 a year |
(Department for Business and Trade, July 2025)
That is three and a half working weeks a year, gone, on money that was already yours. Time spent chasing is the single largest late-payment cost at business level, ahead of debt collection, legal costs and finance costs.
The unclaimed win
When is the right time to chase?
Before it is due. Only 4.1% of businesses do this, which makes it the most obvious unclaimed win in the whole subject.
A workable sequence:
- A few days before the due date: a short, friendly reminder that it is coming up. Not a chase. Just a note.
- On the due date: a plain "this is due today" with the invoice attached again.
- A week after: a direct but polite follow-up naming the amount and the date.
- Later: a reference to your terms and statutory interest, if you intend to use it.
The early reminder does most of the work, because a lot of late payment is not refusal, it is an invoice sitting in someone's inbox.
The bit that actually stops people
How do I chase an invoice without falling out with the customer?
Chase early, chase consistently, and keep it boring.
- Make it routineA reminder that always goes out on the same schedule is not an accusation. A reminder that only goes when you are annoyed reads like one.
- Attach it againPut the invoice in the message again. A surprising share of "late" invoices were simply lost.
- Never open angryNever let the first contact be an angry one. If your first message is on day 45 and it is cross, you have skipped every cheap step.
- Keep the recordEvery reminder logged, so if it does escalate the trail already exists.
- Why it gets put offThe awkwardness is the real reason chasing gets put off, especially in domestic trades where you liked the customer. Taking the decision out of it, so the reminder just goes, is most of the fix.
The bit that is different for trades
What if the customer is a homeowner and not a business?
Then there is no accounts department to ring. No purchase order, no payment run, no finance team chasing it up their end. It is one person, in one house, who will pay when they get round to it. That is a different job from chasing a company, and it needs a different habit.
- Agree the terms before you start. Put them on the quote, in writing, not on the invoice at the end. Nobody argues with a term they already accepted.
- Take a deposit on anything with materials in it. You should never be the one funding someone else's kitchen.
- Stage the payments on a longer job, so you are never carrying three weeks of work and hoping.
- Invoice the day you finish, while the work is fresh and they are pleased with it. The invoice that goes out a fortnight later is already half forgotten.
- Keep the reminder automatic, so it never lands as a personal chase from someone they met.
The longer you leave it, the harder it gets. A week after the job, a reminder is just admin. Two months after, it feels like an accusation, and you are the one who ends up feeling awkward about asking for your own money.
The number everyone gets wrong
How long can a customer take to pay you?
The Commercial Payments Bill proposes 60 days, with limited exemptions.
Two related numbers get confused with it:
- 45 days applies to central government contracts under PPN 018, from 1 October 2025. It was also proposed as a future general maximum, and the government said it does not intend to take that forward now.
- 30 days is the default term under the Late Payment of Commercial Debts (Interest) Act 1998 where no term is agreed.
Where an agent helps
Can something else do the chasing for you?
Yes, for the routine part, which is most of it.
It sends the reminder before the invoice is due, which almost nobody does. It sends the one on the day, and the one after. It uses your firm's own wording and your own terms, and it logs every message so the trail exists if you need it.
It cannot make anyone pay
It is not a solicitor. If a customer is flatly refusing to pay, you need people and advice, not software.
It will not rescue a bad contract
If you agreed 90-day terms, the most it can do is remind them politely on day 91.
It does not guess
It works from your own terms and records. If it is not certain, it says so and hands off to a person.
Frequently asked questions
The questions trades firms ask first.
What does late payment cost across the UK?
Almost £11 billion a year, about 0.4% of GDP, according to research for the Department for Business and Trade and the Small Business Commissioner published in July 2025.
Do firms really go under because of late payment?
About 14,000 a year, or 38 a day, on the government's central estimate. The published range is wide, roughly 2,000 to 27,000.
How much time does chasing actually take?
138 hours a year for firms of 10 to 49 people, costing about £2,337. That is roughly three and a half working weeks.
How much money is sitting unpaid right now?
£26 billion, averaging about £17,000 for each affected business.
Should I chase before the invoice is even due?
4.1%.
Where the facts come from
Where the figures come from.
- £11 billion a year; £26 billion owed; £17,000 per affected business; 1.5 million businesses (28%); 14,000 closures (38 a day); 133 million hours; 86 hours per affected business; 138 hours and £2,337 (small); staff time the largest business-level cost; 4.1% chase before the due date. Department for Business and Trade and the Office of the Small Business Commissioner, research by London Economics, July 2025. assets.publishing.service.gov.uk/media/688a089a6478525675738ff9/late_payments_research_impact_on_uk_economy.pdf
- Commercial Payments Bill: 60-day maximum, 8% over base. Department for Business and Trade, May 2026. gov.uk/government/publications/commercial-payments-bill-factsheets/commercial-payments-bill-overview
- The 45-day maximum proposed and not taken forward. Department for Business and Trade, government response, March 2026. gov.uk/government/consultations/late-payments-tackling-poor-payment-practices/outcome/late-payment-consultation-time-to-pay-up-government-response-web-version
Get started
Get the reminder out before it is late.
Enter your website address and hear Ryku take a call, send the reminder and log the trail live, before you commit to anything.