A business invoicing £720,000 a year
Customers take an average of 58 days to pay. Steady chasing brings that down to 35.
- Sales invoiced a day (£720,000 ÷ 365)
- £1,973
- Owed by customers at 58 days
- £114,411
- Owed by customers at 35 days
- £69,041
- Cash released
- £45,370
The cash comes in once, as the amount owed settles at the lower level. A year of the Financial Controller level from £1,500 a month is £18,000 + VAT.
An illustrative example. The business is invented and so is every figure. Sales are before VAT; with VAT on the invoices every figure is higher.
What the law lets you charge a late payer
When no payment date is agreed, a business customer’s payment is late 30 days after they get the invoice, or after you deliver, if that is later. An agreed date between businesses must usually be within 60 days.
On a late business payment you can claim statutory interest at 8% plus the Bank of England base rate, unless your contract sets a different rate. You can also charge a fixed sum once for each payment: £40 on a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more.
Source: gov.uk, late commercial payments and claiming debt recovery costs, checked October 2026.
We work out the interest and the charge on each overdue invoice and tell you the amount. Whether to claim it from a customer you want to keep is your decision.
