Business-to-Business Letter Before Action Template

Most people reach for a business-to-business letter before action template at the point where reminders have stopped working and the next step is a county court claim. The debt is undisputed, the invoice is months old, and the letter needs to do real work rather than sound cross.

Commercial debts sit outside the Pre-Action Protocol for Debt Claims, so the requirements differ from a consumer letter before action. You still need the correct legal entity named, a clear statement of the sum owed, statutory interest and compensation set out, a deadline of around 14 days, and confirmation of what follows.

Below we cover the wording that holds up, the mistakes that get a claim delayed, and a template you can adapt.

Template for Business-To-Business Letter Before Action

TO

Name / business:
Address:
Postcode:
Tel:
Email:

FROM

Name / business:
Address:
Postcode:
Tel:
Email:
Date:

Dear Sir/Madam,

Re: Outstanding Commercial Invoice

Reference / account number:
Amount overdue: £
Invoice number:
Days overdue:
Statutory interest: £
Recovery charge: £

We are writing to request payment of the commercial invoice detailed above, which remains overdue under our agreed payment terms.

Despite previous reminders, we have not received payment or a substantive response. As no dispute has been raised, we understand that the outstanding balance remains due.

Unless the total amount due is received by the payment deadline shown below, we may have no alternative but to commence debt recovery or court proceedings.

Where applicable, statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998, fixed recovery compensation and reasonable recovery costs may be added to the debt. We may also seek court fees and any other recoverable costs.

If you dispute the debt, provide full details and supporting documents within the response period shown below. To avoid further action, contact us promptly to make payment or propose a suitable repayment arrangement.

Payment deadline:
Response period:

Sincerely,

Signature:
Full name / business name:

Download Free PDF Letter Template Business-To-Business Letter Before Action Template

What a Business-to-Business Letter Before Action Must Contain

Commercial debts fall outside the Pre-Action Protocol for Debt Claims, but Practice Direction on Pre-Action Conduct still applies, and a judge can penalise you on costs if your letter falls short. Getting the contents right costs you nothing and removes the most common grounds for delay.

The debtor’s correct legal identity. Name the limited company exactly as registered, with its company number and registered office address, rather than a trading name or a branch address. Claims issued against the wrong entity get struck out and you pay for the privilege.

A clear statement of the debt and its basis. Set out the contract or order the debt arises from, the date it was made, whether it was written or verbal, and what you supplied. Then itemise each unpaid invoice by number, date and amount.

The sums claimed, broken down. Show the principal, statutory interest at 8% above base calculated to the date of the letter with the daily rate going forward, and fixed compensation of £40, £70 or £100 per invoice under late payment legislation. Add contractual recovery costs only where your terms allow them.

A payment deadline and method. Fourteen days is standard for a business debtor who has already been chased. State the bank details, the payment reference, and the exact date by which cleared funds must be received.

An invitation to dispute or propose terms. Ask the debtor to set out any dispute in writing with supporting documents, or to make a proposal if they cannot pay in full. This protects you on costs and often produces a settlement without a claim.

A statement of consequences. Confirm that court proceedings will be issued without further notice if payment is not made, and that you will seek interest, court fees and costs. Reference alternative dispute resolution briefly, since the court expects parties to have considered it.

Enclosures and proof of service. Attach copy invoices, the contract or purchase order, and a statement of account. Send by first class post to the registered office and by email, then diarise the deadline and keep proof of both.