Automated Invoice Dunning for SMEs in London: Cost and ROI (2026)

The verdict in three sentences

For an SME turning over £4m to £26m, every day of DSO you remove releases between £11,000 and £71,000 of cash. Well-configured automated dunning (segmented sequences, bank reconciliation, escalation to sales) usually removes 15 to 25 days of DSO within six months. The project nearly always pays back in under a quarter, whether you pick an off-the-shelf tool or a custom build.

Why your DSO is stuck at 68 days

Under the Late Payment of Commercial Debts (Interest) Act, UK business-to-business payment terms default to 30 days and can be extended by contract, typically to 60. A 68-day DSO means a large share of your customers pay late and your team chases too late or inconsistently. In the SMEs we work with, the causes are always the same:

• manual chasing triggered "when there is time", often 15 days after the due date;
• no distinction between a large account that habitually pays at 75 days and a small customer in difficulty;
• weekly bank reconciliation, which sends reminders to customers who have already paid;
• account managers unaware of overdue invoices on their accounts.

Useful reminder: the Late Payment Act lets you claim statutory interest at the Bank of England base rate plus 8 points, and a fixed compensation of £40 to £100 per invoice depending on its amount. Quoting this automatically in the second reminder often changes the behaviour of habitual late payers.

Off-the-shelf tool or custom automation: 2026 figures

There are two routes. SaaS credit control tools (Chaser, Upflow, Satago, Sidetrade for larger accounts) plug into your accounting software and offer ready-made sequences. Custom automation makes sense when your ERP is bespoke, when you invoice from several entities, or when you want dunning embedded in your CRM and customer portal.

Rule of thumb: if your invoicing runs on standard software (Xero, Sage 50, QuickBooks, NetSuite) and you issue fewer than 1,500 invoices a month, start with SaaS. Above that, or with an in-house ERP, custom automation becomes cheaper within 18 to 24 months.

Dunning sequences that actually reduce DSO

Automation achieves nothing without good sequences. Here is the standard sequence we deploy, adjusted by customer segment:

Three settings make the difference: automatically exclude disputed invoices, adapt the tone for strategic key accounts, and stop all reminders as soon as a payment lands in the bank account.

Mini case study

Sarah, CFO of an industrial services SME turning over £13m in London, starts from a 68-day DSO. She opts for custom automation connected to her ERP and CRM for £12,000, plus £130 a month for maintenance.

• Six months after go-live, DSO falls to 49 days, a gain of 19 days.
• Cash released: 13,000,000 × 19 / 365 = £676,700.
• Financing saving (overdraft or invoice finance at 6.5%): about £44,000 per year.
• Finance team time recovered: 2 days a week, close to 90 days a year, worth about £21,000.

Total annual gain of about £65,000 against a first-year cost of £13,560. The project pays back in under three months, before counting lower bad debt.

FAQ

How many days of DSO can we realistically remove?

SMEs moving from manual chasing usually gain 15 to 25 days within six months. Beyond that, you need to change the payment terms themselves, for instance a 30% deposit on order.

Will automation upset our key customers?

Not if sequences are segmented. For the 20 accounts that often represent 60% of turnover, automatic reminders are replaced by alerts to the account manager, with an appropriate tone.

Do we need to change accounting software?

Rarely. Over 90% of projects connect to the existing system through an API, a scheduled export or direct database access. Only very old software with no export needs an intermediate module.

How long does a custom project take?

Allow 6 to 10 weeks: 2 weeks of scoping and sequence design, 3 to 5 weeks of development and bank connection, 1 to 3 weeks of testing on a pilot portfolio.

Is a payment link in the reminder worth it?

Yes. A card or instant bank payment link raises the share of invoices settled within 72 hours of the first reminder by 20 to 35%, at a cost of 0.5 to 1.5% per transaction.

Let's scope your project. Send us your invoice volume, ERP and current DSO, and we will price a precise scope between £5,000 and £15,500 with a 6 to 10 week timeline. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.