For small businesses, overdue invoices can have a significant impact on cash flow, supplier payments and day-to-day operations.

If a customer or client has failed to pay, it is important to understand the steps that may be available before taking formal legal action.

What should your business consider?

1. Review your records. Check the original agreement, invoice, payment deadline and any correspondence relating to the outstanding amount.
2. Contact the customer. A clear payment reminder may resolve an administrative error or misunderstanding.
3. Consider formal recovery options. Depending on the circumstances, these may include a letter before action, negotiation or court proceedings.
4. Understand your potential entitlement to interest. Statutory interest and compensation may be available for qualifying commercial debts, depending on the circumstances and any contractual terms.

Where payment remains outstanding, legal advice can help you assess the strength of your claim and the most proportionate way forward.

Johnson May Solicitors supports businesses dealing with commercial disputes and debt recovery matters.