Late payment kills more small businesses than poor sales do, because a business can be profitable and still unable to pay wages. The defences are unglamorous and they work: agree terms in writing, invoice immediately, chase from the first day overdue, and stop supplying rather than increasing your exposure while hoping.
Prevention does most of the work, so start there.
Prevent it before the work starts
Agree payment terms in writing before you begin, including the due date, what happens if it is late, and who exactly you invoice. Confirm the person instructing you has authority to commit the company.
Take a deposit on anything with material costs. For a new customer, check the company is registered and in good standing through the Companies and Intellectual Property Commission and ask for trade references, because a business with a reputation for paying late usually earned it.
Remove the excuses
Most late payment is administrative rather than deliberate. Invoice the day work is done, address it to the right person, include a purchase order number where one exists, and make the payment details unmistakable.
An invoice sitting in the wrong inbox is not a payment dispute, but it looks identical from your side. Confirm receipt rather than assuming.
Chase early, factually and persistently
Follow up on the first day overdue, not the thirtieth. Keep it factual rather than apologetic or aggressive: the amount, the due date, and a request for a payment date.
Escalate in steps: a reminder, a call, then a written request to a senior person. Businesses that chase promptly get paid ahead of those that do not, because limited cash goes to whoever asks first.
Know when to stop supplying and when to escalate
Continuing to supply a customer who has not paid increases your exposure rather than your chances. Stop, and say why, before the debt grows.
For genuine non-payment, a letter of demand often resolves it. Small claims processes handle modest amounts without an attorney. Weigh the recovery cost against the amount, and treat a written-off debt as a decision rather than a drift.
Frequently asked questions
Why is late payment so dangerous?
Because a profitable business can still be unable to pay wages. Cash, not profit, is what keeps the doors open.
What is the best prevention?
Written payment terms agreed before work starts, a deposit where materials are involved, and checking a new customer’s standing.
When should I follow up?
The first day overdue. Limited cash goes to whoever asks first, so prompt businesses get paid ahead of patient ones.
Should I keep supplying a customer who owes me?
No. Continuing increases your exposure rather than your chances of being paid. Stop and explain why.
What are the escalation options?
A letter of demand, then small claims for modest amounts without an attorney. Weigh recovery cost against the sum owed.
Originally published in November 2018. Updated September 2026 into practical guidance on preventing and recovering late payments.
