Short answer: pass an undisputed business invoice to a debt collector once your own reminders, a call to a decision-maker and a formal letter before action (with 14 days to reply) have not produced payment or a genuine reason for non-payment. Move sooner if there are warning signs, such as broken promises, silence, or changes at Companies House.
Most businesses wait too long before handing an invoice to a collector. It feels like a big step, there is worry about the relationship, and there is always the hope that the next email will bring the money. But an overdue invoice does not usually get easier to recover with time. Contacts move on, records go missing, other creditors get paid first, and a company in difficulty can run out of money altogether.
This guide gives a practical point at which to escalate, without inventing hard rules. Debt Collection UK is an introducer: we pass unpaid invoices owed by limited companies, LLPs and PLCs to independent partner agencies, who carry out the collection. We do not collect debts ourselves and we are not authorised by the FCA.
Why does timing matter so much?
The longer an invoice sits unpaid, the more chances the debtor has to prioritise other suppliers, and the weaker your position becomes if the company later enters an insolvency process. Delay also costs you directly: your own time spent chasing, interest on your overdraft, and the work you cannot do while you chase. Escalating at the right moment is about protecting cash flow, not about being aggressive.
There is also a legal backstop. Under the Limitation Act 1980, section 5, a claim on a contract must normally be brought within six years. Long before that, though, evidence and goodwill fade.
What does a sensible escalation timeline look like?
Every business is different, but the following sequence works for most commercial invoices.
At the due date
Send a friendly reminder with the invoice attached. Assume an oversight. Ask the customer to confirm a payment date.
Around two weeks overdue
Phone the accounts team and ask directly whether anything is stopping payment. If there is a query, resolve it quickly. If there is not, ask for a date and confirm it by email.
Around three to four weeks overdue
Escalate to someone with authority to pay, such as the finance director. If you are still supplying, consider whether to pause further work until the account is brought up to date, if your contract allows it.
The letter before action
If payment still has not arrived, send a formal letter before action. For a company debtor, follow the Practice Direction – Pre-Action Conduct and Protocols: set out the debt, the figures, and give a reasonable period to pay or explain any dispute. In a straightforward case, 14 days is treated as reasonable. Add your statutory rights under the Late Payment of Commercial Debts (Interest) Act 1998: interest at 8% above the Bank of England base rate, fixed compensation and reasonable section 5A recovery costs. You can unlock our UK final-demand template below.
When the deadline passes
If the 14 days pass with no payment and no genuine dispute, this is the natural point to instruct a collection agency. You have given the customer every reasonable chance, your paper trail is in order, and further internal chasing is unlikely to change the outcome.
Which warning signs mean you should move sooner?
Some signals suggest you should not wait for the full sequence:
- Repeated broken promises. A second missed “payment date” is a pattern, not an accident.
- Complete silence. No reply to emails, calls or letters from a customer who used to respond.
- Companies House changes. Overdue accounts, a proposal to strike off, a change of registered office to an insolvency practitioner, or directors resigning. You can check this on Companies House.
- A new company with a similar name. Sometimes a business starts trading through a new entity while the old one is left with the debts.
- Late disputes. A complaint raised only after a payment demand, with no earlier record, deserves a firm, evidence-based response.
If you see signs of formal insolvency, such as a notice in The Gazette, collection activity may need to stop and you may need to claim in the insolvency instead.
When should you not pass the invoice to a collector yet?
Hold back if the customer has raised a genuine dispute about the work, the price or the delivery. A collector works best on a clear, undisputed balance. Deal with the dispute first: exchange documents, try to agree what is owed, and consider mediation. Our guide on disputed commercial invoices explains when collection should pause.
Also check the debtor type. If the customer is a sole trader or an individual, the Pre-Action Protocol for Debt Claims applies, with different steps. We only accept limited company, LLP and PLC debtors.
Is it worth the cost?
The usual objection is cost. Compare the alternatives honestly. Continuing to chase internally costs staff time with no guarantee of a result. A solicitor will often charge for their time whether or not the debt is recovered. A court claim needs an upfront fee, banded by value, shown on GOV.UK.
Through Debt Collection UK, the fee is a fixed 15% of what is recovered, and it is only charged when you are paid. There is no upload fee. Recovery is not guaranteed, but the cost is tied to the result. Separately, your Late Payment Act rights let you claim fixed compensation and reasonable recovery costs from the debtor on a qualifying debt, which can offset some of the expense. See business debt collection fees explained.
What should you have ready when you instruct?
- The unpaid invoice or invoices.
- The contract, order or accepted quote, if you have one (helpful but optional).
- Proof of delivery or completion.
- Your reminders and the letter before action.
- The debtor’s exact legal name and Companies House number.
Frequently asked questions
Is there a legal minimum before I can use a debt collector?
No law sets a minimum number of days. But sending a proper letter before action first puts you in a stronger position if court is needed later.
Will using a collector end the customer relationship?
Not necessarily. A professional agency is firm and courteous. A customer who will not pay an undisputed invoice is already damaging the relationship.
Can I instruct on one invoice?
Yes. You can upload a single invoice owed by a limited company, LLP or PLC.
What if the debtor pays me directly after I instruct?
Tell the partner agency straight away. How the fee applies to direct payments is set out in the partner’s terms, which you agree before work starts.
Ready to escalate?
If your letter before action deadline has passed and the invoice is undisputed, upload it using the form below. We introduce it to an independent partner agency. The fixed fee is 15% of what is recovered, only when you are paid.