What is an overdue invoice?

When an invoice becomes overdue

The due date comes from the terms you set, such as 14 days from the invoice date or net 30. The invoice is overdue from the next day. If no due date was agreed, the law may fill the gap: in the UK, a business payment with no agreed date is late 30 days after the customer received the invoice or the goods or service, whichever is later, and agreed terms between businesses usually must be no more than 60 days unless that is fair to both. In Australia, contracts and industry rules set most terms, and large businesses must report their payment times to the Payment Times Reporting Regulator, which publishes how long they take to pay small suppliers.

What to do when it happens

Start with the assumption that the invoice was missed, not ignored. Send a short reminder that quotes the invoice number, amount and due date, attaches the invoice and repeats how to pay. If that does not work, call. People who ignore emails often pay within a day of a phone call. After two reminders and a call, put the overdue amount in writing with a date for payment and the next step you will take. Only then consider interest, a collection agency or a small claims tribunal, and check what your terms allow before charging anything extra.

Interest and late fees

In the UK, a business can claim statutory interest on late commercial payments at 8 percent above the Bank of England base rate, plus a fixed sum for the cost of recovery, unless the contract sets a different rate. In Australia there is no general statutory late fee for business invoices; a late fee or interest must usually be in the agreed terms, and a fee that is a penalty rather than a genuine estimate of cost may not be enforceable. The page on late payment fees in Australia covers what can be charged.

Common mistakes

Waiting weeks before the first reminder is the biggest one, because the longer an invoice sits, the lower it falls in the client's queue. Sending angry first reminders is the second: tone can escalate later, but it is hard to walk back. Threatening interest that the terms never mentioned is the third. And losing track of who has been reminded, so one client gets five emails and another none, makes chasing look careless.

Where it shows up in the product

In the proposals module an invoice turns overdue the day after its due date. Each invoice has a reminder preset: off; gentle, on the due day and 7 days after; standard, 3 days before, on the due day, then 3, 7 and 14 days after; or firm, 3 days before, on the due day, then 2, 5, 9 and 14 days after. At most 6 reminders are sent, at least 20 hours apart, and each one carries the pay link.

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