What to do when a client will not pay
There is a point where a late invoice stops being late and becomes a debt. You have nudged, you have rung, you have sent the formal reminder, and either nothing comes back or what comes back is a reason that keeps changing.
What follows is the route in England and Wales. Scotland and Northern Ireland differ in the detail, and other countries differ entirely, so take the shape of it rather than the specifics if you are elsewhere.
First, be honest about which kind of not paying this is
Three kinds, and they need different things.
They cannot pay. A small business with no money is not going to be argued into having some. Your best outcome is a payment plan you actually get, agreed in writing, with the first instalment taken before you agree to the rest. Something is better than a judgment against a company that folds.
They will not pay because they are unhappy. This is the one worth slowing down for, because it is often recoverable and because a dispute you did not know about will ambush you later if you go legal without addressing it. Ask directly what the problem is. If it is fair, fix it or credit it. If it is not, you now have their objection in writing, which is worth having.
They will not pay because you are further down the list than people who chase harder. This is the most common on commercial work and it is the one the formal route is actually built for.
The letter before action
Not a chasing message. A specific document you are expected to have sent before a court will consider the claim, and it should say so on its face.
It sets out the invoice, the amount, the work it relates to, the dates, what you have already sent, and a final period to pay. Fourteen days is standard for a business debtor. Send it by email and by post, and keep both.
Add what you will claim if it is not paid: the debt, statutory interest, the fixed recovery charge, and the court fee. On a business to business debt statutory interest runs at 8% plus the Bank of England base rate, and there is a fixed sum on top scaled to the size of the debt.
Most debts that are going to be paid are paid at this rung. A letter before action is the first thing you send that visibly costs the recipient something, and for a business that has simply been ignoring you it changes the arithmetic of ignoring you.
The money claim, and whether it is worth it
If the deadline passes, the route for an ordinary debt is a money claim online. No solicitor, a fee scaled to the amount, and you can add the fee and the interest to what you are claiming.
Do the sum before you start, because this is where people lose money pursuing money.
On a debt of £2,480 the fee is a small fraction of the debt, the process takes an evening to file, and if the debtor is solvent it is clearly worth it. On a debt of £180 the fee is a large fraction of the debt, and once you count the evening you spend on it and the possibility of a hearing, you are working for nothing to make a point. Making the point is a legitimate choice. Just make it deliberately rather than by momentum.
The other question is whether there is anything to collect. A judgment against a dissolved company is a piece of paper. Check the company still exists and still trades before you file, because winning is not the same as being paid, and enforcement is a separate process with its own fees.
What makes the difference if it does go that far
The paperwork you already have, or do not.
A signed acceptance of the quote, so there is no argument about what was agreed. Written agreement for every variation, because variations are where "we never asked for that" lives. Invoices that were correctly addressed and correctly numbered. The chasing history, showing you behaved reasonably throughout.
None of that is created at the point of dispute. It is created by how you run every job, which is the real reason to bother with it on the jobs that go fine.
Writing it off
Sometimes the right answer is to stop.
If the sum is small, the debtor is broke, or the time is costing you more than the debt, write it off and put the hours into work that pays. There is also a tax consequence worth asking your accountant about, because a genuinely bad debt is not income you should be taxed on.
What is not optional is learning from it. Almost every unpaid invoice has a moment earlier in the job where it could have been seen coming: a customer who queried everything, a deposit that had to be chased, a stage payment that came late while you carried on working anyway. The pattern is nearly always visible in hindsight, which means it was visible at the time to somebody looking.
The prevention, which is duller and works
A deposit, so you are never fully exposed. Stage payments on anything long, with work pausing if one is not paid, said out loud before you start rather than announced on the Wednesday you stop.
And attention to the first late payment rather than the third. A customer who pays the first invoice on day fifty is telling you what the second one will do, and the cheapest time to change the terms is before you are owed a lot.