How to chase unpaid invoices without losing the customer

Late payment is common, and it is not only your problem. In Xero’s 2026 report on small business in South Africa, 42% of the small businesses it describes say they struggle with late payments, and 62% had cash flow issues in the past year. The page does not publish the sample size, so read the figure as a sign of how common the problem is, not as a precise national rate.

The short answer: have a timetable, send every reminder on it, and let the tone harden slowly. A customer who is reminded politely and early usually pays. A customer who hears nothing for 60 days and then gets a threat does not feel like a customer any more.

When should you send reminders, and in what order?

Pick one schedule and use it for every invoice, so no customer feels singled out and you never have to decide whether to chase. The table below is a sensible starting point for a small business on 30-day terms. It is our suggestion, not a rule of law.

What should each reminder say?

Copy and adapt the wording below. Put the invoice number, amount in rands, due date and pay link in every message, so the customer never has to look anything up. Replace the words in square brackets.

1. Before the due dateHi [name], a quick heads-up that invoice [number] for R[amount] is due on [date]. You can pay here: [link]. Thank you for your business.
2. On the due dateHi [name], invoice [number] for R[amount] falls due today. Pay here: [link]. If you have already paid, thank you, and please ignore this message.
3. 7 days lateHi [name], we have not yet received payment for invoice [number], R[amount], which was due on [date]. It may simply have slipped through. If there is a problem with the invoice or the work, please tell me and I will sort it out. Pay here: [link].
4. 14 days lateHi [name], invoice [number] for R[amount] is now 14 days overdue. Could you confirm the date we can expect payment? If a part payment or a payment plan would help, let me know and we can agree something. I will phone you tomorrow if I do not hear back.
5. 30 days lateDear [name], invoice [number] for R[amount] was due on [date] and is now 30 days overdue. Please pay by [date, 7 days ahead]. If we do not receive payment or hear from you by then, we will have to send a formal letter of demand. I would much prefer to resolve this with you directly.

What makes invoices get paid faster?

Most of the work happens before the invoice is late. These habits remove the common reasons people delay.

• Clear terms in writing. State the due date (not only “30 days”), the amount, your banking details and your interest rate on late payment, on the quote and on the invoice.
• A pay link. In the same Xero report, 45% of businesses say they use online invoices with payment links to speed up collections. A link means the customer can pay from the message, while they are thinking about it.
• A deposit on larger jobs. Ask for part of the money up front, agreed in writing before work starts. It also tells you early whether the customer is serious.
• Invoice the same day. An invoice sent two weeks after the job is paid two weeks later.
• A monthly statement. Customers with several open invoices lose track. A statement lists everything in one place.
• The right person. Send it to whoever pays, which at a larger company is accounts, not the person who ordered.

Can you charge interest on a late invoice?

Only if the law or your agreement gives you a rate. If your signed terms or quote state an interest rate on overdue accounts, that is the starting point. If the debt bears interest and no rate is set by an agreement, trade custom or other law, the Prescribed Rate of Interest Act, 1975 says the rate is the Reserve Bank repurchase rate plus 3,5 percent per annum, taken as it stands when the interest begins to run. Whether a particular debt bears interest at all is a separate question, so ask an adviser.

The Minister must publish the amended rate in the Gazette each time the repo rate changes, so the figure moves. We could not confirm the rate in force today, so we do not quote one. The most recent notice we could read, Notice 3887 of 2026 in the Government Gazette of 17 April 2026, set a rate from 1 March 2026 and may since have been replaced. Check the latest Gazette notice before you quote a figure on an invoice.

When do you send a letter of demand, and what then?

After the firm 30-day reminder has been ignored, or if the customer has promised to pay and missed the date. The Department of Justice’s small claims guidance says a letter of demand should set out all the facts and the specific amount you are claiming, delivered in person or by registered mail, and that the person then has 14 days to settle. The same page says to keep proof that the letter was delivered, such as a post slip, and that the letter now uses Form 4.

A demand is also a sensible step before any court action, and a record of your earlier reminders shows you acted reasonably. Whether it is a legal requirement for a claim in a particular court is a question for an attorney.

Is the Small Claims Court an option for a business?

Often not. The Department of Justice says the court takes claims of an amount not exceeding R30 000, and that this takes effect on 1 August 2026. The same page says a claim may be brought by anyone except juristic persons such as Companies, Close Corporations and Associations. On that wording, a (Pty) Ltd or a close corporation cannot sue there. The wording does not exclude a person trading in their own name, but ask the clerk of your nearest court about your case.

The Department’s announcement of the change says the monetary jurisdiction rises from R20 000 to R30 000 with effect from 1 August 2026. Older guides may still show R20 000. For larger debts or for companies, the route is a magistrate’s or higher court, normally through an attorney or a debt collector.

How long do you have to claim?

Not forever. Under the Prescription Act, 1969, section 11(d), a debt that falls outside the longer periods listed there prescribes after three years, unless another Act provides otherwise. Our reading is that most ordinary invoices fall in that group, but check yours. Section 12(1) says that, subject to exceptions, prescription starts to run as soon as the debt is due. Section 15(1) says it is interrupted by service on the debtor of process claiming payment. Notice that this is about court process, not reminders or a letter of demand. Complications exist, so get advice before a debt gets old.

Where do accounting software and AI agents fit in?

The routine reminders are the part to automate. Xero describes its feature as asking its software to politely nudge any customers who have invoices outstanding, with a choice of how often to email reminders and a record of those sent. It also offers a pay-now button on invoices. Check your own plan and region for the details.

We could not open a current Sage South Africa page on reminders, so we make no claim about what Sage does. Ask Sage or your bookkeeper what your plan offers.

If your reminders live in a mix of Sage, email and WhatsApp, an AI agent can read the overdue list and draft each message in your wording. We build an invoice chasing agent to order. Our page says it reads your books from Sage or Xero but cannot change them, and that for the first period nothing reaches a customer without your tap. The final reminder, and any account in dispute, waits for you every time. Our own method, not a measured result.

What should stay human?

• A phone call to a good customer who is struggling. If a loyal customer of six years has lost a big contract, a template is the wrong tool. Offer a payment plan in writing.
• Disputes. If the customer says the work was wrong, stop reminders and sort out the complaint first.
• Deciding to send a letter of demand or hand a debt to an attorney.
• Any message that mentions interest, fees or legal action. Read it before it goes.

If you chase by WhatsApp, read when you may WhatsApp a customer first, and see POPIA and AI agents for how personal information fits in. For the same idea with appointments, see how to cut no-shows, and for the principle behind approving every message, draft mode.