How to Chase Late Payments as a UK Builder (Without Losing Clients)

The Cash Flow Problem Every Builder Knows

Late payment is the single biggest cash flow problem in UK construction. You've done the work, the customer is happy with the result, but the invoice sits unpaid for weeks or months. Meanwhile, you've got material suppliers to pay, subcontractors waiting for their money, and your own bills stacking up.

The Federation of Small Businesses estimates that late payments cost UK small businesses over £22 billion a year. Construction is one of the worst-affected sectors. If you've been building for any length of time, you've almost certainly had this experience.

Here's how to reduce late payments, chase them effectively when they happen, and protect your cash flow without destroying client relationships.

Prevention: Set Yourself Up to Get Paid

The best time to deal with late payment is before the job starts.

Clear payment terms in your quote. Every quote should specify exactly when payment is due. "Payment within 14 days of invoice" is standard. "Stage payments at foundations, roof-on, and completion" is even better for larger jobs. If the customer signs a quote with these terms, you have a clear agreement to refer back to.

Take a deposit. For any job over £1,000, a deposit of 10–25% on acceptance is standard practice and entirely reasonable. It commits the customer, covers your initial material costs, and immediately reduces your exposure. If someone refuses to pay a deposit, that's a warning sign.

Invoice promptly. Send the invoice the day the work is done — or the day you complete a stage. Every day you delay invoicing is a day added to your payment timeline. If you finish on Friday and don't invoice until the following Wednesday, you've already lost five days.

Use stage payments. For jobs over a few thousand pounds, break the payment into stages. This keeps cash flowing throughout the project and means you're never too far behind if a payment is late. Typical stages: deposit on acceptance, payment at key milestones (foundations, watertight, first fix), and final payment on completion.

The Chase: How to Follow Up

Despite your best efforts, some invoices will go overdue. Here's a sensible escalation approach.

Day 1 overdue — friendly reminder. A simple email or text: "Hi [name], just a quick note that invoice [number] for £[amount] was due on [date]. Can you confirm when payment will be made? Happy to answer any questions." Keep it light and professional. Most late payments are forgetfulness, not malice.

Day 7 overdue — follow up with a phone call. Email is easy to ignore. A phone call is harder. Call, be polite, and ask directly when you can expect payment. If there's a genuine issue (disputed work, cash flow problem on their end), you'll find out now. If they're just slow, the call usually prompts action.

Day 14 overdue — formal written notice. If the friendly approach hasn't worked, send a formal letter or email. Reference the original agreement, the invoice date, the amount outstanding, and state that you expect payment within 7 days. Mention that you reserve the right to charge statutory interest.

Day 21+ overdue — statutory interest and escalation. Under the Late Payment of Commercial Debts Act, you can charge interest at 8% above the Bank of England base rate on overdue invoices for business-to-business transactions. You can also claim reasonable debt recovery costs. For residential customers, the law is slightly different but the principle of pursuing the debt remains.

Statutory Interest: Your Legal Right

Many builders don't know this, but you have a legal right to charge interest on late commercial payments. The current statutory rate is 8% above the Bank of England base rate. On a £5,000 invoice that's 30 days overdue, that's roughly £40 in interest.

You can also claim fixed compensation for debt recovery costs:

You don't need to have these terms in your contract — it's a statutory right. However, including a statement about statutory interest in your payment terms reminds customers that late payment has consequences.

When to Escalate Further

If an invoice is 30+ days overdue and the customer isn't responding to your communications:

Letter before action. This is a formal letter stating that if payment isn't received within 14 days, you'll begin legal proceedings. The phrase "letter before action" carries legal weight — many people pay at this point because they don't want a county court claim.

Small Claims Court. For debts under £10,000, you can file a claim online through Money Claims Online (MCOL). The fee is typically £35–455 depending on the amount. The process is straightforward and you don't need a solicitor. If the customer doesn't respond to the claim, you get a default judgment.

Construction adjudication. For disputes between businesses in construction, adjudication under the Housing Grants, Construction and Regeneration Act 1996 is a quick (28-day) dispute resolution process. It's binding until overturned by arbitration or court.

Keeping the Relationship

The reality is that most late payments come from customers you'd like to work with again — or who'll refer you to others. The goal is to get paid without burning the bridge.

Being professional and systematic about payment follow-ups actually improves relationships, not damages them. Customers respect builders who run their business properly. If you're organised about invoicing and follow-up, it signals that you're organised about the work too.

How BuildScope Helps

BuildScope tracks invoice status automatically — you can see at a glance which invoices are draft, sent, viewed, partially paid, or overdue. The system flags overdue invoices so nothing slips through the cracks. Stage payments, retention, and CIS deductions are all calculated automatically, reducing disputes over amounts.

When an invoice goes overdue, you know immediately — not when you get around to checking a spreadsheet three weeks later.

Try BuildScope free for 14 days →