The short answer
An unpaid invoice is a decision problem, not just a chasing problem. The eight steps below run from the first reminder to a winding-up petition, and at each step the same question applies: is this a customer who is slow, or a customer who is failing? A slow payer responds to process. A failing one does not, and every week you spend chasing a failing customer is a week your debt is losing value. The customer's public record tells you which one you are dealing with before you choose the next step.
Stop and read the customer's record
Before the first angry email, look the company up. New CCJs, late-filed accounts, fresh charges or an active winding-up petition change the whole plan. A company already in distress needs different handling: speed matters more than politeness, and escalation matters more than reminders. This takes two minutes and it is free. If the record shows an active petition against your customer, move straight to step six and take advice.
Check your own paperwork
Find the agreed payment terms, the invoice date, and any purchase order reference. A debt is easiest to enforce when it is undisputed and documented. If the customer has a genuine dispute about the goods or the amount, no court will help you until that dispute is settled, so settle it or factor it in now.
Chase in writing, on a schedule
Reminder, then a firmer reminder, then a final notice. Keep every message dated and factual. This stage recovers most slow payers, because most non-payment is disorganisation rather than distress. Give a clear deadline and say what happens next if it passes.
Send a letter before action
The letter before action is the formal demand that precedes a court claim: the amount, the basis of the debt, and a deadline, usually fourteen days. It costs a stamp and it is required practice before issuing a claim. Many debts land at this point because the letter signals you are prepared to go to court.
Pause supply and cap exposure
Whatever else you do, stop adding to the exposure. Halt further supply on credit, or move the account to payment up front. It is remarkable how often a customer finds money for an order they need today, and that payment also tells you the cash still exists.
Choose the court route
If the letter before action expires unpaid, the routes open up. A county court claim seeks judgment for the money: if the customer does not defend or respond, you get a County Court Judgment against them. A statutory demand for an undisputed debt of £750 or more asks the customer to pay or propose arrangements within 21 days, and non-compliance can ground a winding-up petition. Claims suit disputed or smaller debts; demands and petitions suit clear debts owed by companies that can pay but will not, or can no longer pay at all. If the record from step one shows real distress, the calculation changes: see recovering unpaid invoices when a debtor is near insolvency.
If insolvency starts, register your debt
Once a customer enters administration or liquidation, chasing stops and the process takes over. Submit your proof of debt to the appointed insolvency practitioner promptly. You will sit in the creditor queue, and where you sit is set by law: secured lenders first, then preferential claims such as wages, then unsecured creditors like you. The insolvency hierarchy guide explains the order and what it usually means for trade creditors: a fraction of the debt, late, or nothing.
Fix the next contract before you sign it
Every unpaid invoice is also information about your own process. Credit-check new customers before terms, set exposure limits per customer, put payment terms and interest rights in the contract, and monitor the ones you already have, because a customer that was clean at onboarding can pick up a CCJ any month after. A watchlist that alerts on court activity and late filing costs less than one written-off invoice.
Slow payer or failing payer: the tells
The record separates the two. A slow payer has clean filings, pays other suppliers, and responds to process. A failing payer shows some combination of late or missing accounts, a run of CCJs, new charges over assets, a shortened accounting period, or a first Gazette notice. One signal alone proves little; two or three together are a pattern. The guides on distressed debtors and the signs insolvency is approaching cover the full list, and reducing credit risk exposure covers the position you want to be in next time.
Check any England & Wales company free. R-Score, CCJs, winding-up petitions, charges and five years of accounts on every profile.