Late payment from abroad

What you should do first if an overseas client pays late

When an international client hasn't paid by the date agreed, you've got an overdue invoice on your hands. Go back to the original paperwork: recheck the invoice's due date, look through your bank transactions to see if any payment arrived late, and ask the client if they've already sent funds.

Then, send your first reminder. Keep the tone courteous. Include the invoice number, the exact sum, when it was meant to be paid and all the payment details. Sometimes the problem is just a mix-up, like the wrong payment reference or a transfer not released by their finance manager. A simple, friendly message can resolve these cases before they become bigger issues.

Raising the pressure: interest, official letters and debt collection

If your reminders go unanswered, it's time for a formal demand. This written notice should set out the overdue amount, original due date and a date by which you expect payment. Some countries have laws that decide what interest can be charged on late business debts. The EU works under a directive that sets out default late interest between companies, and the UK has passed its own law. You’ll want to check the contract and local legislation before stating any interest figure.

Tangled cross-border debts may mean using a collection agency or a lawyer where your client is based. Courts are an option but can take a lot of time and expense, especially when you’re dealing with enforcement outside your country. Consider whether the debt is big enough to justify all this before acting.

How to cut the risk of late international payments

Stopping late payment starts with clear terms from the outset. Spell out when the money should arrive, what interest applies after it's late, and who pays recovery fees if it comes to that. Repeat the due date every time you issue an invoice. If you’re taking on a sizeable job or don’t know the client’s reputation, a deposit or partial payment up front is wise. When it feels risky, look up the client’s past with other suppliers (credit reports are easy for most businesses).

Pick a payment deadline that works for both sides. There’s more on this under payment terms net 30. Slow payment from abroad can squeeze cash flow, so you might consider export factoring to get funds sooner, though using this service means more cost and a loss of some control.

Frequently asked questions