In-House Credit Control Starts from Within the Business Itself.
Sending invoices, monitoring payment terms, and following up when payments become overdue are all normal parts of running a business.
Occasionally a reminder email is sent for an unpaid debt. Or, a friendly conversation takes place leading to the payment being made.
But, when invoices go unpaid for longer than expected, the process becomes more complicated and more emotive. Communication slows down, responses become vague, or contact stops altogether. At this point, businesses begin chasing payment more actively to recover what they are owed.
While this is understandable (you are entitled to be paid), it is important to recognise the boundary between legitimate debt recovery and behaviour that could potentially be interpreted as harassment.
Good in-house credit control manages the invoicing procedure. Great in-house credit control owns it.
This guide explains how internal credit control works, the common challenges businesses face chasing unpaid debts, and where the limits of acceptable collection activity lies.
Key Takeaway
In-house credit control helps businesses manage payment terms, monitor invoices and recover overdue payments before formal debt recovery becomes necessary. The key is maintaining structured, professional communication while understanding the legal boundaries between legitimate debt collection and conduct that could be perceived as harassment.
What is the Role of In-House Credit Control?
Credit control is the main financial function within every business. Its purpose isn’t just “sending out invoices”. It is to create a structured process that supports timely payment and protects cash flow.
In-house credit control starts long before an invoice becomes overdue. It includes delivering the company’s payment terms, monitoring accounts, and communicating with clients when issues arise.
Typical responsibilities within internal credit control may include:
- Setting out clear invoicing terms and conditions.
- Issuing clear and accurate invoices.
- Confirming payment terms with customers.
- Monitoring payment due dates.
- Sending reminder notices as invoices approach or pass their due date.
- Maintaining records of all communication relating to payment.
Payment issues can be resolved before they become significant problems. Great credit control keeps a professional relationship with your clients. Clients know what to pay, when to pay, and who to pay. And, the steps that will be taken if they don’t pay. Keeping conversations about money open can stop them from becoming confrontational or stressful.
Why Businesses Often Chase Debts Themselves
When a client fails to pay on time the natural step is to contact them directly. Starting with a reminder email. Maybe a phone call or two. Leading to asking for an update on the payment.
In many situations this works perfectly well. Payment delays can occur for a variety of reasons. Such as administration errors, internal approval delays, or short-term cash flow pressures within the debtor’s business.
A simple conversation often clarifies the situation and leads to payment.
Because of this, most businesses prefer to attempt debt collection themselves. This can preserve relationships and maintain a sense of control over the situation.
However, problems may arise when communication becomes inconsistent. Or, when the debtor repeatedly delays payment without providing a clear resolution.
When Communication Begins to Break Down
Overdue invoices create pressure on both sides of a commercial relationship. From the creditor’s perspective: unpaid invoices affect cash flow and require time and attention to resolve.
From the debtor’s perspective: financial pressures or operational challenges may make the situation uncomfortable or difficult to address.
As a result, communication sometimes begins to break down…
It can feel like you’re being ghosted. When this happens, businesses may feel the need to increase their contact attempts to secure payment.
Often, this is where the credit control process becomes more emotionally charged.
The Risk of Letting Emotions Influence Debt Recovery
An unpaid invoice isn’t just an “accounting issue”. It represents work completed, goods supplied, or services delivered without the agreed payment being received.
It is natural for frustration to develop when payment delays continue.
Business owners and credit controllers may feel ignored, taken advantage of, or placed in a difficult financial position. In response, they may increase the frequency of contact or adopt a more direct tone in communication. While these reactions are understandable, they can make the situation more difficult to resolve.
When communication becomes confrontational or overly persistent, the debtor may become defensive or disengage entirely. This can reduce the likelihood of constructive conversation and prolong the recovery process.
Maintaining a calm and professional approach is essential when managing in-house debt collection.
When Can Chasing a Business Debt Become Harassment?
In the United Kingdom, businesses are legally permitted to pursue payment of legitimate debts. However, the law also places limits on how those debts may be pursued.
One of the key provisions relevant to debt recovery is Section 40 of the Administration of Justice Act 1970, which addresses conduct that may constitute harassment in connection with the recovery of a debt.
The purpose of this legislation is to prevent behaviour that is oppressive or designed to intimidate a debtor. Although this law is most commonly associated with consumer debt collection, the principles surrounding reasonable conduct and communication are widely recognised across commercial recovery practices as well.
Examples of behaviour that raises concerns include:
- Excessively frequent contact within a short period of time.
- Contacting individuals at unreasonable times or in inappropriate ways.
- Aggressive or threatening language in correspondence.
- Pretending to be a legal body or representative.
- Misleading statements about legal consequences.
- Contacting a debtor in ways designed to cause embarrassment or public pressure (for example, posting about the debt online).
When frustration grows and communication breaks down, the risk of crossing professional boundaries increases. Understanding these limits helps ensure that internal credit control remains both effective and legally appropriate.
Note from Jodi Tierney, Practicing Solicitor. “I get it. They haven’t paid their bill. You’re stressed, angry, down on funds, and maybe even a little bit embarrassed that you trusted them.
Don’t send that angry email, and don’t leave a cursing voicemail. Focus on the facts of the debt and the legal consequences of late payments under The Late Payment Act.
What Can Happen If a Debtor Raises a Harassment Complaint?
If a debtor raises a harassment complaint, they may believe collection activity has become excessive or inappropriate. Such complaints may arise where the debtor feels pressured, subjected to repeated contact, or threatened.
If a complaint is made, several consequences may follow.
These may include:
- Formal complaints being raised with regulators or industry bodies.
- Disputes escalating unnecessarily.
- Damage to professional relationships or reputation.
- The debtor raising counter-allegations during legal proceedings.
Even if a complaint has little legal foundation, it can still complicate the recovery process. This diverts time and resources away from resolving the original debt.
Stay cool, stay calm. Maintaining professional standards throughout credit control activity is essential. When conversations about payment become stressful, taking a moment to reset can help maintain professionalism. Some people use techniques such as “box breathing” — inhaling for four seconds, holding for four seconds, exhaling for four seconds, and holding again. Try this before chasing debt with emotions. A calm approach keeps the conversation focused on facts rather than frustration.
Best Practice When Chasing Unpaid Business Debts
When pursuing debts internally, following a structured and consistent approach reduces the risk of escalation while improving the chances of debt recovery.
Professional credit control practices often include the following principles.
Use a Structured Reminder Process
Rather than contacting the debtor repeatedly without a clear plan, it is often helpful to follow a structured sequence of reminders.
This may include:
- An initial reminder shortly after the due date.
- A follow-up reminder requesting an update.
- A further reminder outlining the need for resolution.
Spacing communication appropriately helps maintain professionalism. Whilst demonstrating that payment is expected.
Avoid Repeated Calls in Short Periods
Repeated attempts to contact a debtor within a very short timeframe can quickly become counterproductive. It may also create the perception of undue pressure.
Allow reasonable time for the debtor to respond before escalating contact.
Maintain Clear Communication
All communication with the debtor should remain professional, calm, and factual. Messages should focus on the outstanding invoice, the agreed payment terms, and the request for payment or an update.
Avoid language that could be interpreted as aggressive or personal.
Keep Accurate Records
Keep a clear record of all correspondence, calls, and payment promises. These provide clarity if disputes arise. Documented communication also supports formal debt recovery action if it becomes necessary.
Be Careful When Referring to Legal Action
Businesses sometimes reference legal action to encourage payment. These statements should only be made if they represent a genuine possibility. Threatening legal action that is unlikely to be pursued can escalate tension unnecessarily.
When In-House Credit Control Reaches Its Limits
Despite best efforts, there are situations where internal credit control becomes difficult to sustain. When communication has broken down entirely, when disputes emerge regarding the underlying invoice, or when repeated promises of payment fail to materialise. Debt collection can become a full-time role, stretching resources away from the business – whilst adding financial pressure.
Sometimes, the business has outgrown their internal credit control abilities.
Involving a professional debt collection service reintroduces structure and neutrality into the situation. This often changes the dynamic of the conversation. It signals that the matter is being addressed, whilst allowing both parties to move away from direct personal confrontation.
Conclusion: Protecting Your Business While Recovering What You Are Owed
Recovering unpaid invoices is an unavoidable reality for many businesses. Most customers pay on time, occasional delays or disputes can arise in any B2B trading environment.
Strong in-house credit control plays a vital role in protecting cash flow and maintaining professional relationships. However, when payment delays continue or communication becomes difficult, it is important to recognise the limits of internal recovery efforts.
Maintaining a calm and structured approach helps avoid unnecessary escalation. Protects your reputation, and ensures that any further recovery action can proceed on a clear and professional basis.
There is a boundary between legitimate debt collection and conduct that could be interpreted as harassment. This guide give businesses confidence to pursue outstanding debts while remaining within appropriate legal and professional standards.
We can handle all parts of debt collection, debt recovery, and debt mediation – unsure where to start? Contact us for no win – no fee services.
FAQ: In-house Credit Control
In-house credit control is the process a business uses internally to manage invoicing, payment terms, and the recovery of overdue payments. It typically involves issuing invoices, monitoring payment due dates, sending reminders, and communicating with clients when payments become overdue.
A business should chase an unpaid invoice using a structured, professional approach that focuses on the facts of the debt rather than emotion.
Chasing a debt becomes harassment in the UK when the conduct used to recover the debt is considered oppressive, misleading, or designed to intimidate the debtor.
Under Section 40 of the Administration of Justice Act 1970, behaviour intended to harass a debtor in connection with the recovery of a debt may be considered unlawful
