Back to Debt & Cheques Debt & Cheques

Unpaid Invoices and Commercial Debt in the UAE

Late payment of invoices is a cash flow problem for many UAE businesses. The legal options depend on how well the sale was documented and what the contract says about payment.

This guide focuses on business-to-business debts. See legal steps for an unpaid debt for the general sequence.

Check what you can prove

An invoice alone is weaker than an invoice supported by a purchase order, delivery note or acceptance record and, ideally, correspondence acknowledging the amount. Gather these before pursuing.

Contract terms that matter

Payment due date and any grace period
Late payment interest or charges
Dispute procedure for invoices
Retention of title or right to suspend supply
Governing law and forum

Responding to disputed invoices

If the customer disputes quality or quantity, review the contract's complaint procedure and keep records of what was delivered. A genuine dispute about part of an invoice does not always justify withholding the undisputed part.

Escalation

Escalate in stages: reminder, account statement, formal demand and then proceedings if needed. See preparing a commercial claim.

Credit control going forward

Check customers' licences and credit history before large orders
Use clear payment terms in signed documents
Consider deposits, staged payments or security
Monitor ageing of receivables and act early

Cheques

If you hold post-dated cheques, track presentation dates and note the reasons for return if any. See bounced cheque consultation.

How a consultation can help

A consultation can review your contracts and invoice records, suggest improvements to terms and outline recovery options. It cannot guarantee payment.

Frequently asked questions

Can I stop supplying a customer who has not paid?

Depending on the contract, you may have a right to suspend, but check the clause and give proper notice to avoid breaching it.

Should I use a collection agency?

Be careful about methods used and compliance with the law. Seek guidance before engaging one.

Does VAT matter on unpaid invoices?

Tax treatment of bad debts has its own rules, so consult tax guidance. See tax and VAT compliance.

Related guides and services

General information only. Please read our Legal Disclaimer.