Customers are paying slower: fix your terms before Christmas, not in January

By Jason Sibley

If a few customers have started paying later this year, you're probably not imagining it. The latest surveys suggest a wider problem. Here are some practical steps for the next few weeks, with AI drafting and you making every decision.

This is general information, not legal, tax or financial advice. Ask a solicitor about your contracts and your accountant about cash and tax.

What the latest surveys say

These three surveys each have their own sample, so none describes your customers exactly.

• Bibby Financial Services' SME Confidence Tracker for Q3 2026 says 60% of SMEs report customers taking longer to pay than a year ago. SMEs are owed an average of £72,462 in unpaid invoices, up 13% year on year.
• The Coface UK Payment Survey 2026 says 89% of UK companies reported payment delays in the past year. Delays average 34 days, two days longer than last year, and average agreed payment terms are 57 days.
• A Howden trade credit insurance survey says 29.5% of businesses spend more than six hours a month chasing unpaid invoices.

Your own ledger matters more than any survey. Before reading on, check how many invoices passed their due date this year, and by how long.

Why December is the moment

This section is my judgement, not something the surveys say.

Many offices wind down in the second half of December. Finance staff take leave, payment runs get skipped or bunched together, and an invoice sent in the middle of the month may go unread until the new year. Your own costs carry on. If a few payments slip into January, you feel it as you're restarting after a break.

It's also far easier to change terms on new work than to renegotiate during a job or after an invoice is late. A change agreed in the quiet weeks before Christmas applies to work you take on afterwards. Your accountant can tell you which of your own bills land in January.

Review terms for new and slow payers now

Start with facts, then decide.

Step 1: list who has paid late

Export your invoices from your accounting software and identify customers who paid after the due date this year. Note any new customers whose payment history you don't yet know.

Step 2: decide who gets what

You decide who gets credit. AI can't make that call. You know which customer has paid late twice because their finance person left, and which one is just slow. You might keep your usual terms for long-standing reliable customers. For new or slow payers, you might ask for a deposit, shorter terms or a different way of paying. Choose terms you're comfortable explaining to the customer.

If a signed contract already sets the terms, a letter won't override it. Check with your solicitor before changing anything.

Step 3: have AI draft the letter

Fill in the square brackets with your decisions, then read the draft carefully before sending it.

Draft a short, polite letter to a customer about a change to our payment terms. Use plain British English. Be friendly and clear, with no legal language.

About my business: [business name and what we do]
About the customer: [customer name and how long we've worked together]
What I've decided to change: [for example a different payment period, a deposit on new work, or a different way to pay. Only include what I've decided.]
When it starts: [the date I choose, and whether it covers new work or new invoices only]
The reason, in my words: [one honest sentence]

Rules:
- Use only the details I've given above. Do not invent figures, dates, percentages, fees or interest charges.
- Do not make any legal claims or mention laws, rights or penalties.
- If anything is missing, put a clear [GAP: what's needed] marker for me to fill in.
- Keep it under 150 words, with a thank you for their custom.
- Add a suggested email subject line.

Send it from your own email once you're happy with every line.

Reminders before the due date, not after

Most of us only write to a customer once an invoice is late, when things are already awkward. A friendly note before the due date is easier to write and receive. Try this sequence:

• a short message when you send the invoice, with the due date and how to pay
• a light reminder a few days before it falls due
• a note on the due date itself
• a polite follow-up once it's overdue

Choose the gaps that suit your trade. Then ask AI to draft each message in your voice:

Draft four short email reminders for an invoice, in plain British English and a warm, professional tone: on sending, shortly before the due date, on the due date, and after it is overdue. Use these placeholders: [customer name], [invoice number], [amount], [due date], [how to pay]. Do not invent any figures, dates, fees or legal wording. Mark anything you're unsure of as [GAP] for me to fill in.

I can't promise this will cut the time you spend chasing, but it costs little to try. Our piece on getting paid without the awkward chase covers tone in more detail. If your invoices are unclear, start with AI for bookkeeping and invoices.

One aged-debt list

Keep one list of everything unpaid and review it weekly. A spreadsheet is enough. Use these columns:

• customer
• invoice number
• amount
• due date
• days overdue
• last contact
• next step

Sort it with the oldest at the top. Set aside 15 minutes on the same day each week to update it and send any messages due. For a ready-made layout, follow the weekly cashflow sheet guide. Before pasting customer details into any AI tool, check its data settings, or use initials instead of names.

The law hasn't changed yet

The Commercial Payments Bill is not yet law. According to UK Parliament, the Lords third reading is scheduled for 20 October 2026. That's one stage. I won't guess what happens next or when anything would apply to you. Our piece on the Commercial Payments Bill and late payment explains what's known.

Your existing rights still apply. Read late payment rights you already have and ask a solicitor for advice before relying on them in a dispute. Don't wait for a bill to pass before tidying your terms.

If you'd like a hand

At My AI Apprentice we run AI sessions for small businesses, including practical ones on invoicing and cash tracking. If that sounds useful, you're welcome to get in touch. No pressure either way.