If a client doesn’t pay - legal and practical steps for UK SMEs

• Cash flow challenge: Clients aren’t paying invoices on time, leaving my business without the cash to cover bills and payroll.

• Perfect for: SMEs dealing with overdue invoices and needing clear next steps to recover the money.

Novuna helps SMEs recover from late payments with a mix of practical funding solutions and debt recovery support.

Whether you need a cash flow bridge while waiting for invoices to be settled, or expert help chasing payment, we make sure your business isn’t left struggling.

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Practical and legal steps to take:

Step 1: Double-check the basics

Before moving to recovery, make sure the invoice was sent correctly, with the right details, due date, and payment terms. A polite reminder email or phone call often resolves things quickly if there’s been a simple oversight.

Step 2: Send a formal reminder

If payment still hasn’t arrived, follow up in writing with a clear statement of what’s owed, when it was due, and any late payment charges that may apply. This shows you’re serious and creates a paper trail if you need to escalate further.

Step 3: Add late payment charges

UK law allows small businesses to charge statutory interest and compensation on overdue invoices. You don’t need to include this in your contract, it’s your legal right. Making clients aware of this often prompts faster action.

Step 4: Consider mediation or repayment plans

Sometimes the client wants to pay but is under financial strain. Offering a staged repayment plan or using mediation can resolve the issue without damaging the relationship or heading straight to legal action.

Step 5: Small claims court for unpaid invoices

If the debt is under £10,000, you can use the small claims process in the UK. It’s designed to be simpler and less costly than full legal proceedings. The very act of filing often motivates clients to settle before it reaches a hearing.

Step 6: Use debt recovery experts

If chasing invoices is eating up your time, outsourcing to a debt recovery service can take the stress off your shoulders. Professionals know how to recover money while keeping client relationships as intact as possible.

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How Novuna Business Cash Flow can help

We support SMEs facing unpaid invoices by:

• Providing immediate funding against outstanding invoices.

• Comparing recovery providers to ensure you get expert support.

• Helping you protect your business from future late payment risks.

Our goal is simple: to keep your cash flow stable so late payments don’t threaten your business growth.