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Late Payments No More – How SweetTreats Recovered £20k with Help from the Small Business Commissioner

Late Payments No More – How SweetTreats Recovered £20k with Help from the Small Business Commissioner

  3rd July, 2025

When Priya launched SweetTreats, a boutique dessert brand supplying local cafés, she never expected her biggest challenge would come from delayed payments. By year two, her business was thriving – but her cash flow was choked. One client owed her nearly £20,000, and had stopped responding to her invoices.

“I was losing sleep,” Priya recalls. “I had paid for ingredients, staff, packaging – but couldn’t afford to pay myself. I didn’t know what to do until someone mentioned the Small Business Commissioner.”

The Office of the Small Business Commissioner (OSBC) provides free, impartial support for small businesses dealing with late payments. Priya submitted her case online and within a week, a caseworker contacted her. They guided her through a formal complaint, wrote directly to the company, and supported her legally without costing a penny.

“It wasn’t just about the money – it was about having someone on my side,” Priya said. Within 30 days, she received full payment.

Since then, she’s added clauses to her contracts (using this FREE guide by the SBC), and always requests deposits for large orders.

Priya now sleeps much better and is able to pay herself and her staff.

If you have issues with late invoice payments don’t lose sleep, contact us – hello@founderhut.co.uk or the SBC.

Additionally, here are some steps for dealing with late payments, outlined by the SBC:

1. Check the Payment Terms 

  • Go over your original invoice and contract to confirm the payment terms, due date, and any late fee policies you may have included. 
  • Make sure there are no errors in the invoice that might have delayed processing. 

2. Send a Polite Reminder 

  • A gentle email or message reminding your customer about the outstanding invoice can often resolve the issue. 
  • Keep the tone professional and friendly, including invoice details such as the amount, due date, and payment instructions. 

3. Contact the Client Directly 

  • If there’s no response to the reminder, call or meet with them to discuss the issue. 
  • Sometimes there are legitimate reasons for delays, such as financial difficulties or administrative errors. 

4. Resend the Invoice 

  • If your customer claims they never received the invoice or they misplaced it, you should resend it with a clear subject line like “Resending Invoice #[number] – Payment Overdue.” 
  • Double-check that all payment details, including bank account information, are accurate. 

5. Charge Late Fees 

  • Gently remind your customer that statutory interest and compensation can be applied on unpaid invoices. The amount you can charge depends on the amount outstanding, and what’s written in your contract. 
  • The SBC has an Interest Calculator can help assist in calculating what you can charge. Interest calculator. 

6. Set Up a Payment Plan 

  • If the client is struggling with cash flow, you could offer to break the payment into manageable instalments. 
  • Ensure all terms are clearly outlined and documented in writing and shared by email to avoid future disputes. 

7. Issue a Final Demand Letter 

  • If the invoice remains unpaid, a formal demand letter detailing the outstanding amount, deadline for payment, and potential consequences of non-payment may be necessary. 
  • This serves as an official notice before considering legal action.

What to do if you still have no joy?

If none of this results in your invoice being paid you may need to seek legal action. Having a consultation with a solicitor can help assess your options and quite a few offer free or low-cost initial appointments. There are also organisations like your local Citizens Advice or Law Centre that can provide additional guidance and support.

If you are looking to take legal action the SBC have further recommendations and links to help small businesses looking to take legal action to recover debts:

Taking Legal Action

Legal action can involve sending a solicitor’s letter or making a money claim, which may prompt payment without court proceedings.

Documents You Will Need

You should ensure you have proof that you’ve attempted to resolve the issue before taking legal action. Recommended documentation includes:

·       Final warning letter to the customer about impending action.

·       Correspondence (emails, letters) showing negotiation attempts.

Making a Money Claim

If unpaid invoices remain unresolved, you can file a money claim to recover the amount owed, including compensation. Fees vary based on location and claim amount.

-          Mediation may be offered before court proceedings begin, potentially resolving the issue without further costs.

-          Claims exceeding £10,000 (England/Wales), £5,000 (Scotland), £3,000 (Northern Ireland) should be reviewed with legal advice.

Court Proceedings

If the claim reaches court, a judge’s decision will be legally binding. Costs may be awarded, but legal fees are not typically reimbursed.

Sadly, even if successful, further enforcement action may be required if the court order to pay is not adhered to. These can include obtaining further court orders or hiring bailiffs

Other types of legal action 

A Statutory Demand is a formal request for payment of a debt. If someone owes you money, you can issue a statutory demand without needing a lawyer. The debtor has 21 days to either pay the debt or reach an agreement. If they fail to respond, you can apply to make them bankrupt or wind up their company, however this can require significant time and cost.

👉 If you’re facing late payments, visit [smallbusinesscommissioner.gov.uk](https://www.smallbusinesscommissioner.gov.uk) and download our editable Late Payment Recovery Letter Template.