Accounts receivable dunning automation cost for SMEs in London in 2026

The verdict in three sentences

For a London B2B services SME with GBP 10 million in revenue and a 68-day DSO, dunning automation costs between GBP 120 and 500 a month with a specialist SaaS in 2026, or GBP 10,000 to 25,000 for a custom tool connected to the ERP and the bank. The gain is measured in cash, not subscriptions: moving from 68 to 48 days DSO frees about GBP 550,000. The credit controller who spends 2 days a week chasing invoices gets at least 1.5 days back for higher-value work.

The real cost of late payment

DSO is simple: trade receivables divided by revenue, multiplied by 365. With GBP 10 million of revenue, each day of DSO represents about GBP 27,400 of tied-up cash.

Legal reminder: under the Late Payment of Commercial Debts (Interest) Act 1998, B2B creditors can claim statutory interest at 8% above the Bank of England base rate, plus fixed compensation of GBP 40, 70 or 100 per invoice depending on the amount. An automated tool calculates these and mentions them in reminders, which most SMEs never dare to do manually.

Dunning SaaS or custom automation

Market dunning tools work well as soon as the SME runs a mainstream accounting system. Custom work makes sense when the workflow depends on business data: framework contracts, customer purchase orders, expense rebilling or large-account supplier portals.

For 400 to 600 invoices a month and a standard ERP, SaaS is enough. Beyond that, or with many large accounts requiring a PO number, custom automation pays more.

The dunning sequence that lowers DSO

An effective 2026 sequence has six steps: invoice sent with a payment link, friendly reminder at D-5, chaser at D+3, second chaser mentioning statutory interest at D+15, call scheduled by the tool at D+25, letter before action at D+45. Every payment received at the bank is matched automatically and stops the sequence. Open Banking payment links settle in seconds, which removes the classic excuse of a lost invoice.

Mini case study

Emma, finance director of an engineering consultancy in Farringdon, issues 520 invoices a month. Her credit controller, at GBP 3,800 a month fully loaded, spends 40% of her time chasing, or GBP 1,520 monthly. Emma chooses custom automation at GBP 18,000, connected to her ERP and bank, plus GBP 180 a month of maintenance. In 9 months, DSO drops from 68 to 51 days: GBP 466,000 released, which avoids an invoice finance facility at 7% a year, a saving of GBP 32,600 annually. The controller's chasing time falls to 10%, recovering GBP 1,140 a month. The project pays back in a little over 5 months.

FAQ

Do automated reminders damage customer relationships?

Not if the tone is graduated and personalised. In our deployments, fewer than 1% of customers complain, and 60% of overdue invoices are paid after the first reminder.

How long does setup take?

A SaaS is configured in 2 to 4 weeks. Custom automation takes 6 to 10 weeks, including tests on a sample of 50 customers.

Should we claim Late Payment Act compensation?

It is a statutory right in B2B. Many SMEs mention it without charging it: the tool can add it from the second chaser, which is often enough to speed up payment.

Does the tool handle disputes?

Yes. A disputed invoice leaves the automatic sequence, an owner is notified and the reason is logged. Disputes usually account for 15 to 25% of late payments in B2B services.

Let's scope your project. Send us your invoice volume, your ERP and your current DSO: we price the automation, between GBP 10,000 and 25,000, delivered in 6 to 10 weeks. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.