Credit control software for startups: what to set up at each stage

Summary

Credit control software for startups should be fixed price, connected to the ledger and running from the first invoice. Paidnice suits startups on Xero or QuickBooks Online that want reminders, statements and optional late fees in one tool, from £49 a month. Xero's built-in reminders cover the first few overdue invoices. Upflow is the scale-up option.

• Paidnice: Best for startups that want reminders and late fees in one tool, from £49 a month for 150 invoices and 2 users, priced by invoice volume, not revenue.
• Xero reminders: Best for the first few overdue invoices a month, included with a Xero subscription: up to five email stages on one schedule for the whole organisation.
• Chaser: Best for established firms that want credit checks, letters and automated calls alongside chasing; priced on annual revenue, from £199 a month up to £4m, larger plans past £4m.
• Satago: Best for Sage 50 or Xero businesses that want credit scores and invoice finance alongside chasing, from £25 a month inside Sage 50 or £45 standalone.
• Upflow: Best for scale-ups with a finance team and a high invoice count, price on request, with plans segmented by gross invoice value.

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Do startups need credit control software?

A startup needs credit control software once chasing overdue invoices takes founder time every week, and a reminder cadence costs less to run from the first invoice than to add after the first bad debt.

Late payment costs the UK economy an estimated £11 billion a year and contributes to around 38 business closures a day, according to the UK government's late payment reform announcement.

UK law gives the supplier the right to charge. Under the Late Payment of Commercial Debts (Interest) Act 1998, a UK business can charge 8% above the Bank of England base rate on an overdue B2B invoice, plus a fixed sum of £40, £70 or £100 per invoice, even when the contract is silent on interest. Software turns that right into a charge on the ledger.

Fees are optional. Reminders and statements on their own are a complete use of the software, and the fee policy is a setting you can switch on later.

When does a startup outgrow Xero's built-in reminders?

A startup outgrows Xero's reminders when it needs more than one schedule, a channel other than email, an automatic statement run, or a late fee on the ledger.

Xero's invoice reminders run up to five email stages on one schedule for the whole organisation, each a set number of days before or after the due date. Three are on by default at 7, 14 and 21 days overdue, per Xero Central. Reminders can be switched off per contact or invoice, but there is one ladder for every customer.

After stage five there is no stage six, and the automatic reminders are email only. Statements are sent by hand.

Xero has no native late fee or interest feature. The request to add interest to late invoices was posted on 29 March 2012, holds 1,114 votes with the status Accepted, and Xero's latest reply on 7 July 2025 states there are no committed plans.

See Xero reminders vs a credit control app for the trade-offs, and credit control software vs Excel if the overdue list still lives in a sheet.

What should a startup set up in month one?

Set four things before the first invoice goes out: written payment terms, a reminder cadence, a late-fee clause with a grace period, and a monthly statement run.

1. Payment terms in writing. A due date, the interest rate, the fixed sum, and a signature before work starts. The UK statutory rate is 8% above base, 11.75% with the base rate at 3.75% (Bank of England). The base rate in force on 30 June or 31 December sets the rate for the next six months under SI 2002/1675. Other countries: how much can I charge for late fees.
2. A reminder cadence. One email before the due date, then days 1, 7 and 14 after it, an SMS on the day 14 step, and a task to a named person at day 28. Run it from the first invoice, not from the first bad debt.
3. A late-fee clause with a grace period. Set the days overdue before a fee applies (seven in the setup above) and name the fee in the reminder before it lands. Post the fee to the ledger as an invoice so it enters the customer's payables and their next payment run. Waive it deliberately, with the reason noted, for a customer you want to keep.
4. A monthly statement run. One fixed day a month, open items only, overdue customers first. The statement is where accrued interest shows as a visible line on the balance the customer owes.

Which credit control software fits each stage?

Paidnice fits from the first invoice on a fixed monthly price, Xero's reminders cover the first few overdue invoices, and a quote-priced platform fits a scale-up with a finance team.

Paidnice: accounts receivable automation for Xero and QuickBooks Online, best for startups that want reminders and late fees in one tool, from £49 a month. Essentials covers 150 invoices, 600 emails and 2 users, with SMS and escalation included, priced by invoice volume, not revenue.

It picks up invoices already open when the ledger connects, and runs a late fee per invoice and interest on the statement balance with a Bank of England base-rate toggle. Paidnice customers cut their average wait for payment in half, within 30 days. Plans: pricing page.

Xero reminders: the built-in baseline, best for the first few overdue invoices a month, included with the subscription. They are enough until you want a second schedule, a second channel, or a fee on the ledger.

Chaser: one of the oldest names in UK credit control, best for established firms that want credit checks, letters and automated calls alongside chasing, from £199 a month. Priced on annual revenue: Compact covers turnover up to £4m, with larger plans for firms at £4m and more. Demo before you can buy, and one global late-fee rule.

Satago: UK credit control with credit risk data and invoice finance, best for Sage 50 or Xero businesses that want credit scores, from £25 a month inside Sage 50 or £45 standalone. The standalone Basic plan caps at 100 email reminders a month.

Upflow: accounts receivable software for finance teams, best for scale-ups with a high invoice count, price on request. Plans are segmented by gross invoice value with unlimited seats. Late fees run through the ERP, not inside Upflow.

Wider field: credit control software compared and credit control software for UK small businesses. Xero-only startups: invoice chasing software for Xero and credit control software for Xero. Category page: credit control software.

Common questions

Yes to late fees on a first invoice, no to free credit control software beyond Xero's own reminders, and reminders before fees when customers are new to you.

Can a startup charge late fees on its first invoices?
Yes. In the UK the statutory interest and fixed sum apply to any B2B invoice under the 1998 Act, whether or not the contract mentions them. The statutory interest calculator shows the figure on a given invoice.

Is there free credit control software for startups?
Xero's reminders and statements come with the subscription and are the free baseline. Paidnice is not free software: sign-up is free with no card, the first 20 actions cost nothing, and paid plans start at £49 a month. Trials: credit control software free trials.

Should a startup use reminders only, or fees as well?
Start with reminders and statements if your customers are new to you. Add the fee policy once a customer stretches terms a second time. Both are settings in the same tool, so nothing is rebuilt when the fees go on.