UK invoice payment terms that make a late invoice easier to chase

Most chasing starts with a vague invoice. "Payment due on receipt" means one thing to you and another to a customer whose accounts team pays on the last Friday of the month. If the terms were not clear, you are asking for money while the customer thinks they are on time.

This is a practical list for UK invoices. It is general guidance from a software company, not legal advice. Check the current rules on the government website before relying on any detail, and ask a solicitor for anything that matters.

Say when, in dates

"30 days" is ambiguous. Thirty days from the invoice date, or from the date the customer received it, or from the end of the month? Put an actual due date on the invoice and use it in every reminder. A date can be checked. A number of days can be argued with.

Say how

Put the bank details on the invoice itself, not in a separate email that gets lost: account name, sort code, account number, and the reference the customer should use. A missing reference is a common reason a payment arrives and cannot be matched.

Ask for the right name and number

Large customers often will not pay without a purchase order number. Ask for it before you start the work, and print it on the invoice. An invoice that is rejected for a missing PO number looks like a late payment, and the customer may not tell you.

Know what the law gives you

For business-to-business sales in the UK, the Late Payment of Commercial Debts (Interest) Act can give you a right to statutory interest and a fixed sum on late invoices, even if your contract says nothing. The current rate and fixed sums are set out, with the gov.uk sources, in how to charge late fees on invoices in the US and UK. Our post on late payment fees goes into how to use that without souring the relationship.

Write the terms once, then keep to them

If you tell some customers 14 days and others 45, you will lose track, and so will they. Pick a default, write it in your quotes and your invoices, and make exceptions on purpose.

A short terms block you can adapt

Replace the bracketed parts with your own details:

• Due date: [date]. Payment is due in full by this date.
• Pay by bank transfer to [account name], sort code [00-00-00], account [number].
• Please use [invoice number] as the payment reference.
• Purchase order: [number, if you were given one].
• If this invoice is not paid by the due date, we may charge interest and costs as the law allows.

Check that last line with your adviser first. Only include it if you intend to use it.

Then the reminders can be short

With clear terms, a first reminder can be two sentences: the invoice, the amount, the due date, how to pay. Our dunning templates work from this. The customer cannot say the date was unclear, and you do not need to sound cross.

Where Mugavi fits

Mugavi drafts reminders from your accounting software, waits for you to approve each one, and lets you add payment details that print on statements. It is built and priced in dollars, and we have not tested it with a UK QuickBooks company. If you are in the UK, read the UK page and ask us before you commit. Everything in this post works without any tool.

Related reading: how to charge late fees on invoices in the US and UK, when a UK invoice is really late, by payment method, checking who you invoiced at a UK company before chasing.