Question 1

What can you actually do about late-paying customers?

Accepted Answer

Considerably more than most small businesses realise — including a **statutory right to interest and compensation** that does not need to be in your contract, and that many suppliers never claim because they do not know it exists.

**The statutory position for business-to-business debts.** Where no payment date is agreed, payment is due **30 days** after the later of delivery or invoice. Agreed terms can be longer, but terms that are **grossly unfair** to the supplier can be challenged.

**What you are entitled to when payment is late:**

**Statutory interest** at the Bank of England base rate plus **8%**, running from the day after payment was due.

**Fixed compensation** per invoice, on a scale according to the debt size — a set amount for smaller debts rising for larger ones.

**Reasonable costs of recovery** above that fixed sum, where they exceed it.

**These apply automatically.** You do not need a clause; you cannot be contracted out of them by a term that is grossly unfair.

**The escalation sequence that actually works:**

**Invoice correctly in the first place.** A remarkable share of late payment is caused by a missing purchase order number, the wrong entity name, or delivery to the wrong address. Check the customer's process before invoicing.

**Chase early and by phone.** Written reminders are easy to ignore; a call to the actual payables contact is not.

**Escalate in writing**, stating the amount, the due date, and that you will apply statutory interest and compensation.

**A formal letter before action**, setting a deadline and stating the intended next step. This resolves a large proportion of disputes on its own.

**Court claim**, for straightforward debts, which can be issued online and is inexpensive for smaller sums. A statutory demand is a different and riskier route where the debt is genuinely disputed.

**What prevents the problem:**

**Credit checks** before extending terms.

**Written terms**, including retention of title on goods.

**Deposits and staged payments** for larger work.

**Stopping work** where your contract allows it — the strongest practical leverage.

General information, not legal advice.

Question 2

What should be in a client contract or statement of work?

Accepted Answer

Enough detail that both sides know what is being delivered, when, for how much, and what happens when something changes — because almost every dispute in service work comes from one of those four

Question 3

What is invoice finance, and what does factoring actually cost?

Accepted Answer

Borrowing against money customers already owe you — releasing cash from unpaid invoices rather than waiting for payment terms to run. It solves a genuine problem for growing businesses and is

Question 4

How should a small business manage suppliers?

Accepted Answer

By treating supply as a managed relationship with concentrated risk, rather than as a series of purchases — because the failure of one supplier can stop a business that is otherwise perfectly

Question 5

What do consumer rights rules require of an online seller?

Accepted Answer

Substantially more than selling in a shop — because distance selling adds a cancellation right that has nothing to do with the goods being faulty, plus specific information duties, and the penalties

Question 6

How does bidding for public sector contracts actually work?

Accepted Answer

Through a regulated procurement process designed to be transparent and non-discriminatory — which means the rules constrain the buyer as much as the bidder, and understanding that is what separates

Question 7

What do you legally have to do before hiring your first employee?

Accepted Answer

A specific and fairly short list — and the risk is not that it is complicated, but that several items are easy to miss entirely until something goes wrong. Before they start: Check the right to work.

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