How to Handle Unpaid Invoices from Clients

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Being paid on time ensures that your cash flow remains healthy. Although the majority of clients will pay without a problem, there are occasions in which contractors can encounter difficulty with unpaid invoices.

In these situations, it’s not always easy to know how best to resolve the situation. But by following our top tips, you can ensure that your late payments are resolved as swiftly as possible.

Outline your payment terms from the offset

By including payment terms on all of your invoices, your clients will have clear instruction of when they need to pay you. You should outline your payment information, including your bank details and a deadline for payments. This will also give you a window to follow up in the event of non-payments.

Send a reminder to your client

Often, a gentle nudge can be all it takes to spur a client to pay. Sending an email or letter referencing the unpaid invoice could settle any late payments without any further action being required. This can also help to ensure that your relationship with the client is not compromised.

Incentivise prompt invoice payments

Offering a small discount of the overall cost for invoices paid immediately could encourage your clients to pay you right away. Alternatively, you could charge a small amount of interest on late payments as a warning against not paying on time. Interest can be charged from the day after the last payment date stated in your invoice.

Consider taking further action

If your client is still being uncooperative, you may want to consider seeking legal action from the courts as a last resort. Though the law will most likely rule in your favour, you should keep in mind that the fees incurred from proceeding through the courts can become costly and wherever possible, this should only be used when you have exhausted every other avenue.

Help from ClearSky

For help with all of your financial needs, ClearSky is here to help. As one of the UK’s largest contractor accountants, our team is always here to provide support whenever necessary. To speak to a member of the team, simply call us on 0800 464 0382 or email