What to do when a customer doesn't pay

1. Check the basics

Make sure the customer actually received the invoice, that it shows the right amount, the due date and how to pay, and that there's no complaint about the work. A quick call often solves it.

2. Send reminders

• A friendly reminder on the due date or just after.
• A firmer reminder around a week later, restating the amount and asking for a payment date.
• A phone call. It's harder to ignore than an email, and you'll find out if there's a problem.

Keep a record of every reminder and call.

3. Send a letter before action

If reminders don't work, send a formal letter saying how much is owed, what for, and that you'll start court proceedings if it isn't paid by a set date.

If the customer is an individual, including a sole trader, you must follow the Pre-Action Protocol for Debt Claims in England and Wales. That means sending a letter of claim with the information sheet and reply form, and giving them 30 days to respond before you go to court.

Interest and compensation for business customers

If your customer is a business, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim statutory interest at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt. This doesn't apply to homeowners, where you can only charge interest if your terms said so.

4. Make a small claim

In England and Wales, claims up to £10,000 usually go through the small claims track, and you can start one online with Money Claim Online. There's a court fee based on the amount, which you can usually add to your claim. Scotland and Northern Ireland have their own procedures with different limits.

Winning a judgment doesn't automatically mean you get paid. If the customer still doesn't pay, you can ask the court to enforce it, which has further fees.

Preventing it next time

• Agree payment terms in writing on the quote.
• Take a deposit on bigger jobs, or use stage payments.
• Invoice promptly, as soon as the job is done.
• Put your bank details on every quote and invoice so paying is easy.

How TradeKwote helps

• Payment terms and your bank details are on every quote, so they're agreed before you start.
• On Pro, accepted quotes become invoices in one click, and deposits can be invoiced separately.
• On Pro, the notification bell reminds you when invoices are due soon, due today or overdue, so nothing slips.