Debt Recovery for UK Startups: Get Invoices Paid

January is when overdue invoices start to feel personal.

You’ve done the work, shipped the deliverable, sent the invoice—and then you spend your evenings writing polite follow-ups while your own direct debits don’t wait. For UK solopreneurs and early-stage founders, debt recovery isn’t a legal topic; it’s a growth topic. If cash gets stuck with customers, marketing spend gets paused, hires get delayed, and your runway shrinks.

Most companies get this wrong in one specific way: they treat every late payment the same. The fastest route to getting paid is to sort unpaid invoices into the right bucket and respond with the right level of pressure—early.

The first rule: classify the debt in 10 minutes

Answer first: Your debt recovery success rate goes up when you decide quickly whether the invoice is disputed or undisputed, because the tactics—and the legal routes—are completely different.

There are only two categories that matter:

• Undisputed debt: they haven’t raised a genuine issue with your work; they’re late because of their own cash flow, poor process, or avoidance.
• Disputed debt: they say there’s a problem with the goods/services, scope, quality, timing, or contract—and they’re using that dispute (legitimately or not) to delay payment.

This matters because:

• Undisputed debt can often be solved with tight chasing, clear evidence, and (if needed) a formal escalation path.
• Disputed debt needs resolution first—commercially or through a formal dispute process—before you can expect payment.

A practical way to classify in 10 minutes:

1. Check communications: Have they complained about quality, deliverables, or scope in writing?
2. Check acceptance: Did they approve milestones, sign off work, or keep using what you delivered?
3. Check patterns: Are they slow with everyone, or only with you?

If there’s no real objection to the work, treat it as undisputed and move quickly.

Undisputed invoices: the “firm but fair” recovery sequence

Answer first: For undisputed debt, your job is to remove excuses, document everything, and escalate in predictable steps—without damaging your reputation.

Undisputed invoices are usually about their cash flow or their admin chaos, not your performance. The best-performing solopreneurs I’ve worked with treat collections like an operations process, not an emotional confrontation.

Step 1: Call before you chase (and write everything down)

One phone call can do what five emails can’t. You’re aiming for a specific outcome:

• A clear reason for the delay
• A date you’ll be paid
• A named person accountable for the payment

Then immediately follow up in writing:

“Thanks for the call. Confirming you’ll settle Invoice #1047 (£2,400) by Friday 17 Jan. Please reply to confirm.”

That written confirmation is more than admin—it’s evidence. If you ever need to escalate, you want a simple paper trail that shows the debt was never genuinely disputed.

Step 2: Offer a repayment plan (only with terms)

If they’re honest about cash flow issues, a short-term plan is often better than weeks of silence.

Keep it structured:

• Put it in writing
• Agree exact instalment dates and amounts
• Add a consequence (e.g., work pauses; access removed; formal letter issued)

Solopreneur reality: if you continue delivering while they “sort payment,” you’re financing their business.

Step 3: Use multi-channel chasing—without harassment

Answer first: A light “scatter” approach works because people ignore the channel they find easiest to ignore.

Use:

• Email (with the invoice attached every time)
• Phone
• A posted letter to the registered office (for companies)
• WhatsApp/text only if that’s already a normal channel for the relationship

But stay professional. Don’t send ten messages a day. Don’t threaten things you won’t do. Your aim is to be consistent, calm, and serious.

A simple cadence that works:

• Day 1 overdue: email reminder
• Day 7: phone call + confirmation email
• Day 14: firmer email + “please confirm payment date today”
• Day 21: formal final notice / letter before action (adapt wording to your situation)

Step 4: Know when insolvency pressure is appropriate

The source article highlights a key distinction: for undisputed debts, businesses sometimes use insolvency processes as leverage. This is serious territory and should be used carefully.

• If the debtor is a sole trader, a statutory demand can be served, giving 21 days to pay; if unpaid, bankruptcy proceedings are possible.
• If the debtor is a company, a winding-up petition may be available; serving a statutory demand first is commonly treated as best practice.

Two blunt truths:

1. Insolvency action isn’t a guarantee you’ll get paid. If the company is failing, there may be multiple creditors and HMRC is often near the front of the queue.
2. Never use insolvency threats for a genuinely disputed invoice. Courts can treat it as an abuse of process.

If you’re a one-person business, the biggest value here is often not “going nuclear”—it’s having a clear, credible escalation ladder so customers know you’re not going away.

Disputed invoices: resolve the dispute before you chase the money

Answer first: When a customer disputes an invoice, your fastest path to payment is to reduce ambiguity—get the dispute defined, propose a remedy, and document the attempt to resolve.

Disputes happen. Sometimes you’ve missed a detail. Sometimes the client’s expectations were fuzzy. Sometimes they’re trying it on because they’re short on cash.

Regardless of motive, the approach is the same: turn a vague complaint into a specific list of issues.

Step 1: Get the dispute in writing and narrow it

Ask for a written explanation with:

• What specifically is “wrong”
• Which deliverable is affected
• What outcome they want (fix, replacement, discount, cancellation)
• A deadline for you to respond

You’re doing two things at once: showing you’re reasonable and preventing the dispute from expanding every time you send a reminder.

Step 2: Offer commercial fixes that protect your margin

Practical options (depending on your contract and what’s fair):

• Partial credit note tied to a quick settlement
• Remedial work with a clear scope and timeline
• Replacement deliverables
• A “pay now, fix next” compromise for non-critical issues

A stance I like: never negotiate against yourself. Make one sensible offer, give a deadline, and put it in writing.

Step 3: Use ADR or court—after the right pre-action steps

If resolution fails, you’re typically looking at:

• Alternative Dispute Resolution (ADR) such as mediation, which can be faster and cheaper than court.
• Court proceedings, usually after sending a formal letter of claim.

The source article notes the UK’s pre-action framework:

• For individuals/sole traders, follow the Pre-Action Protocol for Debt Claims.
• For companies, follow the Practice Direction on Pre-Action Conduct.

Both require a letter of claim setting out what’s owed and why, and giving time to respond/pay. For a startup founder, the key insight isn’t the legal jargon—it’s that process matters. If you skip steps, you lose time later.

Make debt recovery part of your growth system (not a panic task)

Answer first: The easiest invoice to recover is the one that never becomes overdue—so build a simple “get paid” system into your sales and delivery.

This is where the “UK Solopreneur Business Growth” angle really shows up. If you’re growing through online marketing—content, social, referrals—your inbound pipeline will mask problems until it doesn’t. A few big late payers can quietly wipe out a month of progress.

Tighten the front end: prevent late payment before it starts

A few changes that usually reduce late payments quickly:

• Payment terms agreed upfront (30 days is common, but don’t assume)
• Deposit or upfront payment for first-time clients (even 30–50% helps)
• Milestone billing for projects longer than 2–4 weeks
• Clear scope + acceptance criteria (what “done” means)
• Invoice immediately on delivery or milestone sign-off

If you sell services, add a “stop work” clause. If you sell digital products or access, build in access suspension for non-payment.

Automate the boring parts (without sounding robotic)

You don’t need an enterprise finance team. You need consistency.

Set up:

• Automated reminders: 3 days before due, on due date, 7 days overdue
• A standard “firm reminder” template you’re comfortable sending
• A folder per client with contract, invoice, and key emails

Automation is especially useful for solopreneurs because it stops you from procrastinating. Debt collection fails when it’s driven by mood.

A simple KPI: “Days Sales Outstanding” (DSO)

If you want one metric to track, track DSO: how long it takes to collect revenue after you invoice.

Even without complex accounting, you can track:

• Average days from invoice date to paid date
• % invoices paid on time
• Total value >30 days overdue

Then set a target. If your average collection time is 52 days and you get it down to 35, you’ve effectively created extra working capital without winning a single new client.

A realistic mini-scenario (that will feel familiar)

Answer first: The most effective debt recovery is boring, documented, and fast—especially when the debtor goes quiet.

A freelance marketer invoices a UK SME client £3,000 with 14-day terms for a website launch campaign. Day 16: no payment.

• Day 16: calls the finance contact; learns “director approval pending.” Sends a confirmation email with the new promised date.
• Day 23: still unpaid. Sends a firmer reminder, reattaches invoice, requests payment date “today.”
• Day 25: no response. Posts a formal letter to the registered office and emails a copy.
• Day 28: client responds, pays within 48 hours.

Nothing dramatic happened. The marketer simply escalated predictably and made it clear the invoice wouldn’t be forgotten.

What to do this week (even if you hate chasing)

Answer first: Pick your top three overdue invoices, classify them, and run a clear escalation sequence—starting today.

If you’re sitting on overdue invoices right now:

1. Classify each one as disputed vs undisputed.
2. Call the undisputed ones and get a payment date.
3. Get it in writing immediately after the call.
4. Send one formal escalation for any debtor that goes silent.

Debt recovery is part of the same discipline that makes online marketing work: consistency, process, and follow-through.

And if you’re planning to grow in 2026—more leads, more clients, more delivery—ask yourself one forward-looking question: what would your business look like if every invoice landed within terms, every month?