Almost every small business that runs out of money is owed money at the time. The work was done, the invoice went out, and it has not been paid — and because the business is small, there is nobody whose whole job is to chase it.

Late payment is not usually a dispute. It is mostly drift: an invoice that landed in the wrong inbox, a purchase order number nobody asked for at the start, a payment run that happens on the 25th and yours arrived on the 26th. Almost all of it is fixable before the work begins, and the rest is fixable by being organised rather than by being aggressive.

Agree the terms before you start

This does not require a contract drawn up by an attorney. It requires an email, sent before you begin, that the customer replies to. Put four things in it:

  • What you are doing, specifically enough that "finished" is not a matter of opinion.
  • What it costs, and what would make it cost more.
  • When you invoice and when you expect payment. "On completion, payable within 30 days" is a term. "When it's done" is not.
  • What you need from them to invoice — a purchase order number, a vendor form, an email address for accounts. Ask now. Asking after the work is done adds a month.

An emailed "yes, that's correct" is worth having. It is not there to be used in court; it is there because most late payment is genuine confusion, and confusion is much cheaper to prevent than to resolve.

Make the invoice easy to pay

An invoice is a document somebody in a finance department has to process, and anything missing sends it to the bottom of the pile without a reply.

Include your full registered business name and registration number, your VAT number if you are registered, an invoice number that follows on from the last one, the date, a clear description of what was supplied, the amount with VAT shown separately if applicable, your banking details, and the payment terms in words. If they gave you a purchase order number, put it on. If they told you which address to send it to, send it there, not to your usual contact.

Then send it the day the work is finished. An invoice sent two weeks late does not start its 30 days two weeks late — it starts them two weeks later than it should have, and that fortnight is yours, not theirs.

The follow-up, in order

Escalate slowly and in writing, and keep every step friendly until it genuinely cannot be. The person you are chasing is rarely the person who decided not to pay you.

  1. A few days before it is due: a short note confirming the invoice is on their system and asking whether anything is outstanding. This one email prevents more late payments than everything after it combined.
  2. The day after it is due: a plain reminder with the invoice attached again. Assume it was an oversight, because usually it was.
  3. A week later: telephone. Not email. Ask for the accounts department directly, and ask a specific question — is the invoice approved, and which payment run is it in? You are looking for a date, not an apology.
  4. Two weeks later: a written notice to the business owner or finance manager, not your day-to-day contact, stating the amount, the age of the debt, and what you will do next.
  5. After that: a formal letter of demand, and a decision about whether to escalate further.

Write down what happened at each step and when. If this ever goes further, the record of a reasonable, patient supplier is worth more than the strength of any single letter.

Stop working

This is the hardest one and the most important. If an invoice is significantly overdue and you are still delivering, you are lending the customer money at your own risk, and every additional day increases what you stand to lose.

Say it early and say it calmly: we'll pick this back up as soon as the account is settled. Do it before you are angry. Suppliers who pause politely at 30 days get paid; suppliers who keep going for 90 days and then explode get an argument.

The real fix is upstream

Chasing is a symptom. The businesses that do not have this problem changed the terms rather than improving the chasing.

  • Take a deposit. A meaningful one, before anything starts. A customer unwilling to commit anything up front is telling you something.
  • Invoice in stages on anything that runs longer than a few weeks, so you are never carrying the whole value at once.
  • Get paid before final delivery where the nature of the work allows it.
  • Check who you are dealing with. A quick look at whether the company is registered and in good standing costs nothing, and a business that has not filed its annual returns in three years is not a business that pays its suppliers promptly.
  • Concentration is a risk. If one customer is 40% of your revenue, they set your payment terms whether or not you agreed to them.

When to escalate, and when to let it go

Formal recovery is worth it when the amount is meaningful, the debt is documented, and the customer can pay but has not. It is rarely worth it when the amount is small, when what you have is a verbal agreement and a disagreement about what was owed, or when the customer genuinely has no money — you cannot collect from an empty account, and you can spend a great deal finding that out.

South Africa has a small claims process for lower-value debts that does not require an attorney, and attorneys and collection agencies handle larger ones, usually on terms that take a share of what they recover. The thresholds and the costs change, so check the current position before choosing a route.

And be honest about the arithmetic. Two days of your own time chasing a small invoice may cost more than the invoice. Sometimes the right answer is a final written demand, a decision not to work with them again, and moving on — which is a business decision, not a defeat.

This is general guidance on commercial practice, not legal advice. Thresholds, interest rules and recovery procedures change; confirm the current position before relying on any of it.