Outsourced invoicing and credit control in the UK

Key takeaways

Outsourced credit control in the UK means a managed team raises your invoices on time and runs a polite, consistent chasing sequence until they are paid, escalating disputes and long-overdue accounts to you. It suits businesses where invoices go out late and chasing happens only when cash gets tight.

• UK law allows statutory interest at 8% above Bank of England base rate on late B2B invoices.
• Invoice within 1 working day of completing the job; late invoices get paid late.
• Run a fixed chasing sequence: reminder before due, then at 1, 7, 14 and 30 days overdue.
• Fixed compensation of £40, £70 or £100 per late invoice applies, depending on its size.
• Keep disputes, payment plans and legal action decisions in-house.

What is outsourced credit control?

Outsourced credit control is a back-office business process outsourcing (BPO) service in which a provider's team manages the steps between completing work and getting paid: raising invoices, sending statements, chasing overdue payments, logging promises to pay and reconciling receipts, under your procedures and in your name.

It is not debt collection. The team acts as your accounts department, maintaining the customer relationship, rather than as a third-party agency that takes over the debt.

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Why do small businesses struggle to get paid on time?

Small businesses struggle because invoicing and chasing compete with delivering the work, and delivering the work always wins. Invoices go out days or weeks after the job, reminders are sent when someone remembers, and awkward phone calls get put off.

Customers notice which suppliers chase and which do not, and pay the ones that chase first. A consistent routine is often enough to change the order.

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What does an outsourced credit control team do?

The team runs the routine every working day, so nothing depends on someone finding time.

• Raise invoices from job sheets, timesheets or completed orders.
• Send polite reminders before the due date.
• Chase overdue invoices by email and phone to a fixed sequence.
• Log promises to pay and follow up if they are missed.
• Reconcile payments received against invoices.
• Report aged debt weekly and flag disputes to you.

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What does UK law say about late payment?

Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can claim statutory interest on late payments from other businesses at 8% above the Bank of England base rate, plus fixed compensation of £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.

GOV.UK guidance says that where no payment date is agreed, payment is late 30 days after the customer receives the invoice or the goods or service are delivered, whichever is later. Business-to-business payment terms should usually be no longer than 60 days. These rights do not apply to consumers. Whether to claim them is a commercial decision that should stay with you.

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What does outsourced credit control cost?

As indicative market ranges, managed offshore finance admin costs around £9–£18 per hour and onshore UK credit control specialists around £20–£35. Many SMEs need a part-time seat. Some UK providers charge a percentage of collected debt instead, which suits one-off recovery more than an ongoing routine.

The return is measured in debtor days: the average time customers take to pay. Bringing cash in faster reduces overdraft costs and the risk of bad debts, and it usually outweighs the cost of the seat.

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How do you keep customer relationships intact?

Keep relationships intact by chasing politely, consistently and in your name. Write the templates yourself, set the tone for each stage, and flag key accounts that should be handled differently. Customers rarely object to a friendly reminder; they object to surprise demands after weeks of silence.

Make escalation clear. Disputes, requests for payment plans and anything that might end in legal action go to you with the full history.

What data and security controls are needed?

Finance data needs tight controls. Give the team access to invoicing and accounts software with permissions limited to what they need: raising invoices, viewing receipts and sending reminders, but not changing bank details or making payments. A processor contract is required, and if the team is offshore, a UK GDPR transfer safeguard.

Invoice fraud through changed bank details is a common scam. Never let bank details be changed on an email request; confirm by phone with a known contact.

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When should credit control stay in-house?

Keep it in-house if you have a handful of large clients whose payments are tied to relationship conversations, or if most invoices involve complex disputes. You can still outsource invoice preparation and reconciliation.

What does this look like in practice?

A pattern we see in construction and professional services: invoices raised in batches at month end, no reminders, and the owner phoning customers when the bank balance dips. A daily invoicing routine and a five-step chasing sequence, run by a team, usually shortens payment times without a single difficult conversation.

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Checklist: set up credit control

Prepare these before handing over.

• Measure current debtor days and aged debt.
• Set an invoicing deadline after job completion.
• Write templates for each stage of the chasing sequence.
• List key accounts with special handling.
• Define what the team escalates and to whom.
• Limit software permissions; block bank detail changes.
• Review aged debt weekly with the team.

Next step

Tell us your invoice volumes and debtor days and we will design the invoicing and chasing routine, with the cost. 30 minutes, no pitch.