Chase late invoices in stages: a friendly reminder on the due date, a firmer one after 7 days, a phone call at 14 days, a formal letter of demand at 30 days, and legal action (small claims court for debts up to R20 000) after that. Most late payments are forgotten rather than refused, so the first reminder resolves the majority.
Before the invoice is late
Prevention beats collection. Get the client's correct billing details and a purchase order number if they use them, agree the terms on the quotation, invoice promptly, and send the invoice to the person who actually pays (often accounts, not your contact). A clear invoice with a specific due date removes the two most common excuses: "we never received it" and "we didn't know when it was due".
The escalation ladder
| When | Action | Tone |
|---|---|---|
| Due date | Automatic reminder with the PDF attached | Friendly, assume oversight |
| Due + 7 days | Second reminder, ask for a payment date | Polite but direct |
| Due + 14 days | Phone call to accounts; confirm the invoice was approved | Professional |
| Due + 21 days | Statement of account, mention interest and suspension of further work | Firm |
| Due + 30 days | Formal letter of demand giving 7 to 10 days to pay | Formal |
| After the demand | Small claims court (up to R20 000), attorney or debt collector | Legal |
Reminder emails that work
Keep them short, attach the invoice every time, and always give the client a way to save face. First reminder: "Hi Thabo, a quick note that invoice INV-0042 for R8 500 was due on 20 September. If it has already been paid, please ignore this; otherwise I would appreciate payment by Friday. Banking details are on the attached PDF." Second reminder: the same, plus "Could you let me know when we can expect payment?"
Interest and suspension
If your terms include late payment interest, apply it consistently and show it on the statement. You are also entitled to pause further work on an overdue account; say so in writing before you do it. Do not withhold work the client has already paid for.
Letter of demand
A letter of demand states the amount, the invoice numbers, the due dates, the interest, and a deadline after which you will take legal action. You can send it yourself; an attorney's letterhead adds weight. Send it by email and registered post and keep proof.
Legal options
- Small claims court: for claims up to R20 000, no attorney needed, low cost. Companies cannot sue in small claims court in their own name, but sole proprietors and individuals can.
- Magistrate's court: for larger amounts, usually through an attorney.
- Debt collectors: registered collectors work on commission; useful for volume.
- Prescription: an ordinary debt prescribes three years after it became due, so do not sit on it.
When to write it off
If the cost of collecting exceeds the amount, or the client has closed down, write the debt off, claim the bad debt for tax where allowed, and tighten your terms for next time: a deposit, shorter terms, or no further credit for that client.
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