How to write an overdue payment letter that gets paid

A polite reminder gets filed with the other polite reminders. A letter that states a specific sum, a specific statutory entitlement and a specific date moves the same invoice into a queue that has a cost attached to it, and that is the queue accounts payable actually clears.

This is the written notice you send after the reminder sequence has run out. What follows is what goes in it, what has to stay out, and the exact numbers you are entitled to state depending on where you and your client are registered. It is procedure, not legal advice; for a specific debt in a specific jurisdiction, half an hour with a solicitor or attorney costs less than a wrongly spent filing fee.

A reminder asks a person; a letter tells an entity what it owes

The reminder sequence (before due, on due, +3, +7, +14) is addressed to a human being and depends on that human being caring. A reminder schedule handles the first thirty days and clears most late invoices without anything harder. When it doesn't, three things change at once.

The letter is addressed to the legal entity, not the project contact. It restates the debt as an arithmetic total rather than a request. And it names what happens on a stated date if nothing arrives. Those three changes are the entire difference, and they are also why the letter is short: everything in it has to be something you would be willing to repeat in front of a judge.

Seven lines carry the letter; everything else weakens it

Note the daily accrual figure specifically. A total interest number is a fact; a per-day number is a reason to pay this week rather than next month. The overdue interest calculator does the division for you, with UK and EU statutory presets built in, and gives you days overdue, interest and total due in the form the letter needs.

In the UK the number is 11.75%, and it does not need to be in your contract

Under the Late Payment of Commercial Debts (Interest) Act 1998, statutory interest on a B2B commercial debt runs at the Bank of England base rate plus 8%. The rate is fixed twice a year: the base rate in force on 30 June applies to interest running from 1 July to 31 December, and the rate on 31 December applies for the first half of the following year (SI 2002/1675 art. 4).

Bank Rate has been 3.75% since 18 December 2025. Statutory interest for 1 July to 31 December 2026 is therefore 11.75%, and it stays 11.75% for the whole half-year even if the MPC moves in the autumn.

On top of interest, section 5A gives you a fixed sum per late invoice: £40 for a debt under £1,000, £70 from £1,000 to £9,999.99, £100 at £10,000 and above. Where your reasonable costs of recovering the debt exceed the fixed sum, section 5A also entitles you to the difference.

Worked as an illustration, not as observed data: a £4,800 invoice 45 days overdue accrues 4,800 × 11.75% = £564 a year, which is £1.55 a day. Forty-five days is £69.53. Add the £70 fixed sum and the letter claims £4,939.53 rather than £4,800. The interest is not the point. Being able to state it precisely, with the section number, is.

In the EU the floor is the ECB rate plus eight points, and the €40 is automatic

Directive 2011/7/EU sets a default B2B payment period of 30 calendar days from receipt of the invoice or the goods, with a hard ceiling of 60 days unless a longer term is expressly agreed and is not grossly unfair to you (Art. 3). Interest accrues automatically once that period passes. You do not have to have sent a reminder for it to start running.

The statutory rate is the ECB reference rate plus at least eight percentage points (Art. 2(6)), where the reference rate is the ECB main refinancing operations rate in force on 1 January for the first half of the year and 1 July for the second (Art. 2(7)). The MRO rate has been 2.40% since 17 June 2026, so the floor from 1 July 2026 is 10.40%. Several Member States legislate above the eight-point minimum, so the figure that belongs in your letter is a national one — check the position in your own country before you quote it.

Article 6 adds fixed recovery compensation of at least €40 per late invoice, automatic, plus reasonable additional recovery costs. Article 7 treats a contract term excluding interest as grossly unfair per se, and presumes a term excluding the €40 to be grossly unfair. In practice that means a client's standard purchase terms cannot quietly delete your entitlement.

A replacement Regulation with a hard 30-day cap was proposed in 2023 and has not been adopted; it remains blocked in Council. The Directive above is what applies today.

In the US the rate is whatever the contract says, with two exceptions worth knowing

There is no general federal statutory interest entitlement between private businesses. If your contract has no late-payment clause, you have no rate to cite, and the honest move is to drop the interest line rather than invent one. Put a rate in the contract for next time and check it against your state's limits on contractual interest.

Two exceptions matter to freelancers. If your client is a federal agency, the Prompt Payment Act rules give you a payment period of 30 days after receipt of a proper invoice, and interest accrues automatically: the regulation states that penalties "shall be paid without regard to whether the vendor has requested payment of such penalty." The rate for 1 July to 31 December 2026 is 4.75%.

If you and the work sit in New York State, the Freelance Isn't Free Act applies to any freelance contract worth $800 or more, alone or aggregated across 120 days. The client must pay by the date in the contract, or within 30 days of completion if no date is stated, and a freelancer who wins a payment claim is entitled to double damages plus reasonable attorneys' fees and costs, with a six-year window. Several other states and cities have passed comparable statutes; check yours before you write "no statutory remedy" off.

The letter

Subject: Invoice 2041 — overdue, statutory interest now accruing

To: Accounts Payable, [Client Legal Name] Ltd
Copy: [Project contact], [Finance contact]

Invoice 2041, issued 12 June 2026, due 12 July 2026, is 45 days
overdue.

Amount outstanding GBP 4,800.00
Statutory interest to 26 August GBP 69.53
(11.75% per annum, GBP 1.55 per day)
Fixed sum, s.5A GBP 70.00
Total due today GBP 4,939.53

Interest and the fixed sum are claimed under the Late Payment of
Commercial Debts (Interest) Act 1998. They apply whether or not the
contract provides for them.

Attached: statement of account; the signed contract dated 2 June
2026; delivery confirmation dated 30 June 2026.

Please arrange payment by 9 September 2026. Bank details are on the
statement. If the delay is a purchase order or an approval rather
than a decision not to pay, tell me which and who owns it, and I
will supply whatever is missing today.

If payment has not cleared by 9 September, I will send a letter
before action.

[Your name]
[Your legal entity name and company/tax registration number]

Line by line. The subject line states the status and the consequence, because it may be the only part a busy AP clerk reads. The letter goes to accounts payable and copies the project contact, not the reverse — the invoice not reaching AP is one of the most common reasons a payment is late, and it is a routing defect rather than a client problem.

The figures are a block, not a sentence, so they can be pasted straight into a payment request. The statutory citation gets one line and no argument; you are stating an entitlement, not persuading anyone of it. The attachments are the evidence you would file, in the order you would file it — a statement of account, not a re-sent invoice PDF. Whether your invoicing tool can produce a per-client statement without you rebuilding it in a spreadsheet is a real difference between products in this category, and it is the line the Bonsai comparison is drawn along: document generation on one side, running the money on the other.

The deadline is a date fourteen days out. The offer to help with a purchase-order problem is there because a meaningful share of late invoices are stuck on an internal step nobody has told you about, and one sentence often unsticks it. The final line names a next step you are actually prepared to take.

The harder version, at day 60

Shorter, higher, and with the accommodating sentence removed.

Subject: Invoice 2041 — final notice before formal action

To: [Director / Finance Director name], [Client Legal Name] Ltd
Copy: Accounts Payable

Invoice 2041 is now 60 days overdue. GBP 4,800.00 principal, GBP
92.71 statutory interest to date, GBP 70.00 fixed sum under s.5A of
the Late Payment of Commercial Debts (Interest) Act 1998. Total GBP
4,962.71, increasing by GBP 1.55 each day.

Six written requests are on file, dated [dates]. No dispute over
scope, delivery or amount has been raised at any point.

All further work on [project] is suspended with effect from today
under clause [n] of the contract dated 2 June 2026.

Payment is required by 24 September 2026. If it has not cleared,
the next document you receive will be a letter before action.

[Your name]
[Your legal entity name and company/tax registration number]

Three changes do the work. It goes to a named director, because escalation in a client organization is vertical, not lateral. It records that no dispute was ever raised, which is the fact that decides most of these cases. And it suspends work, which only helps if your contract permits it — that clause and the rest of the sequence are covered in what to do after the letter stops working.

This is still not a letter before action. That is a separate instrument with its own requirements, and sending one at the wrong moment can cost you more than the invoice.

Four things that make the letter weaker

An apology. "Sorry to chase again" tells the reader the delay is negotiable and that you expect to chase again.

A new discount. Offering 5% off to close it out converts a debt into a negotiation and resets your anchor permanently.

"As you know." It reads as an accusation and it is usually wrong, since the person now reading the letter frequently did not know.

A threat you will not carry out. Say "small claims" only if you have checked the fee and the ceiling and intend to file. The letter's authority is entirely borrowed from your willingness to send the next one.

What to change this week

1. Add the statutory line to your invoice template now, not at the point of dispute — for UK work, that terms are governed by the Late Payment of Commercial Debts (Interest) Act 1998; for EU work, the national rate and the €40; for US work, a stated late-payment rate you have checked. Your invoice template should carry it by default.
2. Record the AP email address and the client's payment run day at onboarding, in the same field where you keep the project contact. That is the single field that most often decides whether a letter arrives anywhere useful.
3. Set a fixed calendar day, once a fortnight, on which every invoice past 30 days gets the formal letter. Chasing fails on scheduling far more often than it fails on nerve, and the full time-to-cash system is mostly a set of dates.

Worklyn's The Polite Chase, part of CFO Mode, drafts the escalation from the invoice's own dates and figures and waits for you to approve it before anything goes out. The letter is still yours; the arithmetic and the calendar are not your problem.