How Are You Managing Late Payments in Your Business?

[DebtRecoveryUK]

Hi everyone, I’m new here and looking forward to learning from this community.

One challenge I often hear from small businesses is the frustration around late payments and unpaid invoices. It’s a tricky balance between maintaining good client relationships and ensuring your business stays financially healthy.

I’m interested to know:

• How do you handle late payments in your business?
• What strategies have worked best for encouraging timely payment without risking the relationship?
• Have you ever used professional help like credit management or debt recovery services? What was your experience?

Looking forward to hearing your thoughts and sharing ideas.

 

[emily1221]

Hey, welcome! This is such a real issue — I think almost every small business owner has been there.

For me, the biggest help has been setting expectations clearly from the beginning. I always include due dates in the invoice and mention them again in my email when I send it. A friendly reminder a few days before the due date also helps a lot more than I expected.
When someone’s late, I try to keep the tone polite but firm. I usually send a follow-up email like, “Just wanted to check in on this — let me know if you need anything from my side.” Most people respond well to that.
I’ve only had to use a debt recovery service once — it worked, but it felt a bit stressful, so I try to avoid it if I can. I’m now testing out automated systems like Stripe’s invoice reminders to take the pressure off.

Curious to hear how others are handling this too — it’s always helpful to share what’s actually working!

 

[bilalkirmell]

Yeah, late payments can be such a pain — especially when you're a small team trying to keep things moving. At Kirmell, we’ve had our fair share of delays, so we started doing a few things to stay on top:

• Clear payment terms upfront (no surprises).
• Gentle nudges before the due date — and a couple after if needed
• For custom work, we sometimes ask for part payment in advance.

It’s not perfect, but it helps! Curious to know how others are handling it — always looking for better ways.

 

[DebtRecoveryUK]

Absolutely hear you. Late payments can drain time and energy fast, especially for smaller teams.

You’re already doing some smart things like setting clear terms and sending reminders, which is great. A few other things we’ve seen work really well for clients:

• Add interest and late fees in your terms. Even if you don’t always enforce them, just having them there often changes the tone
• Use staged invoicing for longer projects. Not just a deposit, but milestone payments along the way
• Send statements, not just reminders. A monthly statement summarising what’s owed looks more official and gets taken more seriously
• Outsource stubborn accounts. For anything dragging on, handing it over to a professional agency can recover payment and keep the relationship intact

 

[DebtRecoveryUK]

Hey, welcome! This is such a real issue — I think almost every small business owner has been there.

For me, the biggest help has been setting expectations clearly from the beginning. I always include due dates in the invoice and mention them again in my email when I send it. A friendly reminder a few days before the due date also helps a lot more than I expected.
When someone’s late, I try to keep the tone polite but firm. I usually send a follow-up email like, “Just wanted to check in on this — let me know if you need anything from my side.” Most people respond well to that.
I’ve only had to use a debt recovery service once — it worked, but it felt a bit stressful, so I try to avoid it if I can. I’m now testing out automated systems like Stripe’s invoice reminders to take the pressure off.

Curious to hear how others are handling this too — it’s always helpful to share what’s actually working!

Really appreciate you sharing this. You’re clearly doing a lot of the right things already. Setting expectations early and using friendly reminders can go a long way, especially when the tone is polite but firm like you mentioned.

A couple of extra tips that might be useful:

Add your payment terms directly on quotes or proposals, not just the invoice. That way there’s no room for confusion before the work even starts

Consider adding a clause about late fees or interest. Even if you don’t always enforce it, just having it there can make clients take the deadline more seriously

Monthly account statements can also help, especially with repeat clients. They come across as more official than individual reminders

For tougher cases, using a debt collection agency doesn’t have to be stressful or aggressive. Many good agencies act more like a firm but fair mediator and often preserve relationships better than chasing it yourself

Great call on automating reminders with Stripe, taking the emotion out of follow ups can really help too. Always good to hear what’s working for others!

 

[DebtRecoveryUK]

As a side note, if you wish to strengthen your final demand, you're more than welcome to reference our name, Redwood Collections, in your communication to the debtor. This often helps prompt a response, as it signals that formal recovery action is being considered.

All we ask in return is that if the deadline you set passes without resolution, you then formally pass the case over to us so we can take the next appropriate steps.