Nobody decides to harass a customer. What happens is that somebody switches on a reminder sequence, sets it to every three days, writes the third message in a firmer tone than they would ever use on the phone, and then stops thinking about it. Eleven emails later a customer who was waiting on their own client has been told four times that their account is in arrears by something that signs itself the Accounts Recovery Team.
That sequence was cheap to build and it changed two things at once. It changed how the chasing feels to the person receiving it, and in some jurisdictions it may have changed which rules apply to you.
- Chasing late payments yourself sits outside most collection regulation, which is exactly why owners assume wrongly that nothing applies.
- In the UK, demands calculated to cause alarm or distress by their frequency or manner are a criminal offence under a statute from 1970, and it binds any creditor.
- The FTC has warned in writing that creditors collecting their own debts should not stop reading at the exemption, because using another name can pull you back in.
- An automated sequence that signs off as a recovery department rather than as your business is the single riskiest default in these tools.
- On a UK business invoice you can add 8 percent above base rate plus a fixed sum of £40, £70 or £100 depending on size, and almost nobody does.
- The most effective early message is not firmer. It is a check that the invoice arrived and is not disputed, which resolves a large share of late payment before tone matters.
This is a narrow piece about the mechanics and the limits of automated chasing. If your question is the broader one of when the money arrives and whether you can cover the month, the ordering of the levers sits in our piece on what a cash flow forecast can and cannot see, where collection ranks first precisely because the money is already yours.
Who do the collection rules actually bind?
Mostly third parties, not you, and that asymmetry is the source of nearly every mistake in this area. A business chasing its own invoice is in a different legal position from an agency chasing it on that business's behalf.
In the United States the Fair Debt Collection Practices Act is aimed at collectors working on someone else's account, and it does not reach commercial debts between businesses at all. Read quickly, that sounds like a shop chasing a consumer customer for an unpaid order has nothing to worry about.
The FTC has published a direct warning against reading it that quickly. Its business guidance post asking companies to think again before assuming they are not covered states the trap plainly: creditors who collect their own debts may see that definition and stop reading, which it calls a big mistake. The specific mechanism is that a creditor using a name other than its own, in a way that suggests a third party is doing the collecting, comes back within scope. It cites a lender that traded under one name and collected under another.
Read that against the default settings of most automation. A sequence that sends from accounts@ and signs itself Collections Department or Recovery Team is doing the exact thing the warning describes, for no benefit beyond sounding more serious. Sign chasing messages as your business, in your own name.
What does the law say about how often you can chase?
In the UK, something much older and broader than most people expect. Section 40 of the Administration of Justice Act 1970 makes it an offence to make demands for payment that, by their frequency or manner, are calculated to subject a person to alarm, distress or humiliation.
The text of section 40 lists frequency alongside manner and timing, which is the part that matters for anything automated. It is not only about what a message says. A demand that would be unremarkable once becomes an offence through repetition, and repetition is precisely what a sequence is for. The section also covers falsely claiming that criminal proceedings can follow non payment, and falsely implying official authority, both of which appear in template libraries more often than they should.
There are sensible carve outs. The provision does not catch reasonable steps to secure payment of a genuine debt, to protect against future loss, or to enforce through legal process. So chasing is lawful, and firm chasing is lawful. What is not lawful is a cadence designed to wear someone down, and a cadence is a setting rather than a sentence, which is why nobody reviews it.
Card renewals sit outside this entirely, since a retry is an automated attempt on a stored instrument rather than a demand made to a person, and the limits on retrying a failed subscription payment come from the card networks instead of debt collection law. The practical translation is a frequency you could defend out loud. If you would not telephone a customer every third day about the same invoice, do not configure an email to do it. A weekly touch after the due date, escalating in formality rather than in volume, is both more effective and easier to justify.
What can you actually add to a late invoice?
On a business to business invoice in the UK, considerably more than most small suppliers ever claim. Two separate entitlements exist and they stack.
The first is statutory interest. Government guidance on charging interest on a commercial debt puts it at 8 percent above the Bank of England base rate for business to business transactions, and works through the arithmetic: on a £1,000 debt at a 0.5 percent base rate the annual figure is £85, which is about 23 pence a day, so fifty days late produces £11.50.
The second is a fixed contribution to recovery costs, which is where the numbers become worth having. The guidance on claiming debt recovery costs sets three bands: £40 for debts up to £999.99, £70 from £1,000 to £9,999.99, and £100 at £10,000 or above, charged once per payment, with reasonable further costs claimable for each attempt to recover.
| Invoice size | Fixed recovery sum | Plus statutory interest | Why it matters to a small supplier |
|---|---|---|---|
| Up to £999.99 | £40 | 8 percent above base, daily | Often exceeds the margin on the order itself |
| £1,000 to £9,999.99 | £70 | 8 percent above base, daily | Turns a polite reminder into a priced consequence |
| £10,000 or more | £100 | 8 percent above base, daily | Small next to the debt, useful as a signal of intent |
| Any size, repeated attempts | Reasonable costs each time | Continues to accrue | The clause most suppliers never invoke |
Naming the entitlement is usually more effective than charging it. A line stating that statutory interest is accruing at the prescribed rate, with the daily figure spelled out, moves an invoice up a payment run in a way that a fourth reminder does not. This is one of the few places where an automated system genuinely helps, because it can compute the running figure per invoice and insert it accurately, which is tedious by hand and wrong when guessed.
Where does automation help and where does it hurt?
It helps at the boring end and hurts at the human end, which is the same division that shows up across back office work. The boring end is larger than it looks.
Knowing which invoices are overdue, by how many days, for which customers, with the interest computed, is pure arithmetic on data you already hold. Almost nobody does this reliably by hand, and a shop that automates only this has captured most of the available benefit. Drafting a first reminder is similarly safe, because a first reminder should be bland.
The hurt begins where judgement enters. A customer who has paid on time for three years and has gone quiet is a different situation from a new account that has never paid, and the sequence cannot tell them apart. Automated escalation treats both as day 14. The relationship cost of that lands entirely on the first customer, who is the one you want to keep, and it is invisible because they do not complain, they simply do not reorder.
The second step in that ladder is the one automation skips and the one that resolves the most cases. A surprising share of late payment is not refusal, it is an invoice that went to the wrong address, a purchase order number missing so it never entered the buyer's system, or a quiet dispute about what was delivered. Asking whether the invoice arrived and is agreed costs nothing and converts an argument about money into an administrative fix.
What should never go into an automated message?
Three categories, and all three appear in templates people paste in without reading. Anything that threatens a consequence you do not intend to pursue, anything that implies an authority you do not have, and anything that names the debt to somebody who is not the debtor.
Threatening legal action you will not take is the most common. It is a poor tactic even where lawful, because customers who are chased frequently learn quickly which threats are real, and the ones who pay late habitually have learned it from better letters than yours. If you will not issue a claim at day 60, do not write that you will.
Implying official status is rarer but more serious, and the UK statute names it specifically alongside falsely asserting that non payment is a criminal matter. Automated templates occasionally borrow the visual language of formal notices, which drifts toward this without anyone intending it.
Disclosing the debt to third parties is the one that catches shops with shared inboxes and team messaging. Copying a chase to somebody at the customer's company who has no role in paying it is a choice you would not make deliberately, and a tool that emails every contact it has on the account will make it for you.
Does any of this change when the customer is a consumer?
Yes, in both directions, and conflating the two is how a shop that sells to businesses and to the public ends up with one sequence that is wrong for half its customers.
The entitlements narrow. Statutory interest and the fixed recovery sums described above come from commercial debt legislation and apply to business to business transactions. A consumer who pays late for an order does not attract them. What you can charge instead depends on what your terms said before the sale, which means the contract has to have done the work in advance rather than the reminder doing it afterwards.
The protections widen. A consumer sits inside the consumer protection regime as well as the general prohibition on harassment, and the UK provision on demanding payment was amended in 2025 to route commercial practices directed at consumers through that consumer law rather than through the 1970 offence. The direction of travel is that chasing a member of the public is held to a higher standard than chasing a company, which is the opposite of the instinct that a business customer deserves more deference.
There is a practical consequence for anyone running one automation across a mixed customer base. The interest line that is accurate and useful on a trade invoice is simply wrong on a consumer order, and a sequence that inserts it everywhere is stating an entitlement you do not have. Split the two flows even if everything else about them is identical.
How long should you chase before handing it on?
Shorter than most small businesses manage, because the cost of chasing is invisible and the cost of referring is a number on an invoice. That asymmetry keeps suppliers sending reminders for months.
A reasonable rule is that once the ladder has been climbed and a dated formal demand has passed its deadline, further reminders from you have stopped being a collection activity and become a habit. The same email at day 90 carries less weight than it did at day 30, and every repetition teaches the customer that nothing follows.
Referring does not have to mean an agency taking a share. A solicitor's letter is a fixed cost and frequently sufficient. In the UK a small claim can be issued online for a fee that scales with the amount, and the credible prospect of one moves payment more reliably than tone ever will. The decision point is worth setting in advance, in the same written rule that sets the cadence, so it triggers on a date rather than on how annoyed you are.
One honest caveat about automation here. A system that can escalate on its own should not be allowed to, and this is the clearest case in the article. Referring a customer for legal recovery is a commercial decision with consequences for a relationship, and it belongs to a person who knows what that customer is worth.
A policy that takes ten minutes to write
Most of the exposure here disappears with a short written rule that you apply to the automation rather than to yourself. Decide the cadence, the sign off, the escalation trigger and the stop condition, then configure to match.
The cadence should be one you would defend, which in practice means weekly rather than every few days once an invoice is genuinely overdue. The sign off should be your business name and a real person, not a department that does not exist. The escalation trigger should be a number of days you set in advance, so that moving to a formal demand is a decision you already made rather than one made in irritation.
The stop condition matters most and is almost never configured. Any reply from the customer, including a dispute or a promise to pay, should halt the sequence and put a human in front of it. Sequences that keep sending after somebody has replied are where the frequency argument becomes indefensible, and they are also where relationships break, since nothing says less about a supplier than a machine that did not notice an answer.
Keep a record of what was sent and when. If a dispute ever reaches a court or an agency, the sequence log is either your evidence that you behaved reasonably or the other side's evidence that you did not, and it will exist either way. The same principle applies when a customer disputes the charge itself rather than the timing, which we covered in the piece on assembling evidence for a chargeback dispute.
What this comes down to
Automated chasing is worth doing, and the objection in this article is not to the automation. It is to the fact that the settings which carry legal and commercial risk are the ones that ship with defaults, get configured once, and are never looked at again. Frequency is a setting. Sender name is a setting. Whether a reply stops the sequence is a setting.
The entitlements run the other way. Statutory interest and fixed recovery costs are real money that suppliers routinely leave unclaimed because calculating them by hand is annoying, which is exactly the sort of annoyance software removes well. Most shops have the risk switched on by default and the benefit switched off.
Getting that the right way round takes an afternoon. Turn the cadence down, put your own name on it, stop the sequence when somebody replies, and start stating the interest that is accruing. A business that runs its own invoicing and customer data, rather than renting the workflow from a platform that decides these defaults for it, finds all four of those easy to change, which is part of the case for owning the system you sell through. Our plans and credits page sets out what that costs if you are weighing it up.