In this article
Credit control is the work behind managing and chasing customer payments: agreeing how you'll be paid, making payment easy, following up what hasn't arrived, and escalating what won't. Most people take it to mean the chasing, and that's only the third of those four jobs and the one with the worst return.
Credit control is really a set of decisions you make before the invoice goes out, and not a set of reminders you send once it's already late.
The short version
- Late payment costs the UK economy almost £11 billion a year, and affected businesses spend an average of 86 hours a year chasing it, on Small Business Commissioner research.
- Invoices set to collect automatically are paid 98.0% of the time. Collected on demand, 90.8% (Adfin platform data).
- Overdue rates fall with time on a system: 23.0% of invoices overdue in month one, 10.2% by month seven.
- Payment method changes on-time rates by 15 percent, from 72.7% for Apple Pay to 57.9% for bank transfer.
- The statutory right to interest exists automatically on business debts. Very few businesses use it.
The four jobs inside credit control
Four jobs, in the order they happen:
- Agree how you'll be paid, including when and by what method.
- Make paying easy, so a willing customer is never held up by your process.
- Follow up what hasn't arrived, consistently and not aggressively.
- Escalate what won't arrive, and stop at the right point.
Most businesses only do the chasing and call it credit control. But how you agree to get paid, and how easy you make it, often decide how much chasing you're left with in the first place.
The costs of late payment
Government research puts a number on it. Late payments cost the UK economy almost £11 billion a year, around 14,000 businesses close annually because of it, and over 1.5 million businesses, some 28%, experience it each year, with roughly £26 billion owed at any time, in the Small Business Commissioner's figures.
If you're the one doing the chasing, the figure that lands hardest is the time. Of businesses surveyed, 22% said they spent staff time chasing late payments, averaging 86 hours a year per affected business, in the DBT and Small Business Commissioner research. That's two working weeks a year spent asking for money you've already earned.
The five decisions that make up credit control
| Decision | Made when | Consequence of getting it wrong |
|---|---|---|
| What terms apply | Before the work starts | If you don't agree to terms before, they will not be honoured |
| How the money will arrive | Before the first invoice | Asking each time instead of collecting |
| Who receives and who approves | At the start of the relationship | Finding out on day 30 could cost a month of cashflow |
| When and how you follow up | When the invoice is sent | A schedule invented after the due date is automatically late |
| When you escalate, and when you stop | Planned in advance | Escalation decided in frustration will never be more effective |
Terms and the agreement to pay
Terms are the fundamentals, not the mechanism. If you agree nothing, the statutory default gives your customer 30 days from the later of the day you performed the work and the day they had notice of the amount owed.
The more consequential decision is how the money actually arrives. Across Adfin, on-time payment varies by 15 percent depending on how your customer pays:
| Payment method | Paid on or before the due date |
|---|---|
| Apple Pay | 72.7% |
| Google Pay | 70.3% |
| Card | 65.1% |
| Bank payment (open banking) | 62.0% |
| Bank transfer | 57.9% |
| Adfin platform data, customer-initiated payments over 26 months. |
What you arrange counts for even more than the method you offer. Where the invoice collects itself, 98.0% get paid and 0.9% go overdue; where you have to ask for the money, it's 90.8% paid and 5.3% overdue (Adfin platform data, requests created in the seven months to the end of January 2026). The two groups aren't identical, because there's usually a direct debit mandate behind the automatic one, and that mandate is the thing moving the number.
Getting the invoice in front of the right person
The stage between issuing an invoice and it being seen is the one no software owns, and it's where most of your avoidable delay lives.
For best results, send to a named person and not to a shared inbox. Put the amount and the due date where they'll be read. Include the reference your customer's system needs. Give them a way to pay from the invoice itself. And find out who approves payment before you ever need to chase.
Across Adfin the median customer-initiated payment arrives 53 hours after the request, with 42.9% inside 24 hours (Adfin platform data). Those hours are counted from the moment somebody sees the request, so whatever time you lose before that gets added to the end of your cycle.
Chasing
Consistency is more important than intensity. A follow-up schedule decided when the invoice is sent will outperform a more aggressive one invented after it goes overdue, and is much more likely to happen in good time.
Three things are worth setting in advance and not in the moment: how often you follow up, who owns it and on which channel, and what the message says. With modern payment softwares, you can leverage AI to automate and optimise all of these factors based on historic client interactions.
You'll read confident claims elsewhere, so treat this as the position: there is no reliable public evidence on which channel or which send time performs best in general, and we're not in a position to publish one either. Anyone telling you Tuesday at 10am is guessing. What is measurable is that a collection you have arranged in advance tends not to need chasing, and that an invoice which never goes overdue needs no channel strategy at all. In truth every client varies, and the best way is to ask, or collect responsiveness data from previous communications. Regardless, the option to offer multiple channels is crucial, and reduces friction.
Invoice size has an impact too, though a smaller one than you'd expect. On-time payment runs at 69.6% on invoices under £100 and 60.1% on invoices of £2,500 and over (Adfin platform data, customer-initiated payments over 26 months), and the middle of the range doesn't line up neatly: invoices of £100 to £249 do worse than ones of £250 to £499. Compare invoices inside one business's own book and most of the gap goes, so what looks like a size effect is largely a difference between the businesses issuing big invoices and the ones issuing small.
Where a large invoice does have to clear a sign-off, earlier confirmation will do more for you than firmer chasing later on.
Escalation, and knowing when to stop
Communications in order of severity: a confirmation before the due date, a reminder after it, a call, a formal demand, a letter before action, then a decision about the small claims court or a collection agency.
Two things which can aid you here: you can charge statutory interest at the Bank of England base rate plus 8%, (11.75% total at the time of writing), and claim fixed compensation of £40, £70 or £100 depending on the size of the debt.
That right applies automatically on business debts whether your contract mentions it or not, and almost nobody takes advantage of it: only 5.9% of businesses had introduced or increased an overdue penalty on their sales invoices, in the same research. That's a penalty measure and not a pure statutory-interest count, but it's the best available indication of how rarely anyone uses the right.
Knowing when to stop is part of the discipline too. If a debt is going to cost you more to pursue than you'd ever recover from it, you're better off writing it off and putting the time somewhere it earns.
Measuring it
Four numbers to track, and "reminders sent" isn't among them:
- The percentage paid on time, broken down by method and by invoice size
- The percentage of invoices that go overdue at all, the number automation moves
- Debtor days or lock-up, for the money-weighted view
- The time you spend collecting, because 86 hours a year is what you're replacing
Look at the trajectory, not a single snapshot. Across Adfin, 23.0% of invoices go overdue in a business's first month and 10.2% by month seven, a 56% reduction, measured on billers in their first seven months of collections (Adfin platform data).
Credit control in an accountancy practice
Accountancy practices have the same four jobs and one extra difficulty: your invoice is a fee note to a client you also advise, so chasing carries a relationship cost that a supplier doesn't have to think about.
The way round it is to move the payment decision to the start. If you capture a direct debit mandate as the engagement letter is signed, payments are collected automatically and the awkward conversation never comes up. Lock-up is the number to watch here, because you can invoice impeccably and still have months of cash tied up in work in progress and debtors.
Where the routine work should sit
The five decisions above are made once. What follows them is repetition: the same reminder, the same confirmation, the same escalation, against a different name each week. That split is worth being deliberate about, because the two halves suit different things.
The decisions need you. What terms you offer, which clients go on a mandate, when you escalate and when you stop: those are judgements about your business and your relationships, and no system ought to be making them for you.
The repetition doesn't need you. Set the rules of engagement once, which channels can be used, how persistent to be, what can happen without asking and where you want to review, and an agent can work through them customer by customer, learning what each one responds to. Messages go out from your own domain and not from a platform.
Most businesses have it the other way round. A person does the repetition, in the gaps between other work, and the decisions get made in the moment, by which time the debt is already old.
Common questions
What is credit control? The work of turning your invoices into cash: agreeing terms and a payment method, making payment easy, following up what hasn't arrived, and escalating what won't. Chasing is one part of it, and not the most effective part.
What is the difference between credit control and debt collection? Credit control is everything you do to be paid on time, mostly before an invoice is due. Debt collection is what happens once an invoice is significantly overdue, and it often involves a third party.
How much does late payment cost UK businesses? Government research puts it at almost £11 billion a year to the economy, with around 14,000 business closures annually and about £26 billion owed at any one time.
How long should I wait before chasing an invoice? Decide the schedule when you send the invoice, not after the due date has gone. A confirmation before the due date prevents more delay than a reminder after it.
Does automating credit control actually work? The measurable effect comes from how you collect, not from how many reminders you send. Invoices set up to collect on their own are paid 98.0% of the time, against 90.8% when you have to ask, with a direct debit mandate usually behind the first figure.
Can I charge interest on late payments? Yes, on business to business debts, at base rate plus 8%, currently 11.75%. The right applies automatically even if your contract says nothing about interest, and you can claim fixed compensation as well.
What credit control metrics should I track? Your on-time payment rate, the proportion of invoices that go overdue, debtor days or lock-up, and the time you spend collecting. Not the number of reminders sent.
Sources
- Department for Business and Trade and Small Business Commissioner — late payments, impact on the UK economy (accurate as of August 2026)
- GOV.UK — claim debt recovery costs on a late commercial payment (accurate as of August 2026)
- Small Business Commissioner — late payments research (accurate as of August 2026)
Reviewed by the Adfin team. This article explains how credit control works and is not legal or financial advice. Last updated August 2026.
