Industry guide · UK
Credit control for hospitality businesses
By AutoSettle · Updated
Quick answer
Credit control for hospitality means taking deposits up front, agreeing clear terms for corporate accounts and events, invoicing promptly after each stay or function, and chasing overdue balances quickly and politely. Most hospitality debt comes from business customers on account, so a firm, friendly and consistent reminder process protects both cash flow and repeat bookings.
Most hospitality income is paid at the point of sale, so it is easy to assume credit control does not apply. But hotels, venues, caterers and event spaces often extend credit to their most valuable customers: corporate accounts, conference organisers, wedding clients paying in stages, and agencies booking on behalf of others.
These are exactly the customers you want to keep, which is why chasing them feels awkward. This guide explains how hospitality businesses in the UK can protect cash flow on account-based sales while keeping the relationship warm.
Where hospitality businesses lose cash
Corporate accounts billed monthly
Business clients who stay or dine regularly often run up a monthly account. If the statement goes to a busy office manager rather than accounts payable, it can sit unpaid for weeks.
Events paid in stages
Conferences, weddings and private functions are usually paid by deposit, interim payment and final balance. Missed interim payments are easy to overlook when the event is still months away.
Post-event extras
Bar tabs, extra covers, room damage and late changes are invoiced after the event, when the client has less incentive to pay quickly.
Agency and third-party bookings
Travel and event agencies may book on behalf of end clients and pay on their own schedule, sometimes only after they have been paid.
Thin margins and seasonality
With tight margins and seasonal cash cycles, even a handful of late accounts can create a shortfall when suppliers and wages are due.
A credit control process for hospitality
- 1
Set clear terms before the booking
Put deposit amounts, payment dates, cancellation charges and payment terms for extras in the booking confirmation or event contract, and get it accepted in writing.
- 2
Take deposits and pre-authorisations
Secure a deposit for events and group bookings, and consider a card pre-authorisation for incidentals where appropriate.
- 3
Vet new corporate accounts
Before extending credit, check the company on Companies House and set a sensible credit limit for monthly accounts.
- 4
Invoice within 24 hours of the stay or event
Prompt invoices reduce disputes because the details are still fresh for both sides. Include booking references and the name of the person who authorised extras.
- 5
Send friendly reminders before and after the due date
A pre-due reminder followed by a polite nudge on the due date resolves most late accounts without any friction.
- 6
Offer an easy way to pay
A payment link for card or bank transfer removes the most common excuse for delay.
- 7
Escalate persistent debts
For accounts that stay unpaid, move to firmer reminders, add statutory interest where appropriate, and pause further credit until the balance clears.
Typical hospitality payment arrangements
| Revenue type | Typical arrangement | Main credit risk |
|---|---|---|
| Walk-in guests and diners | Paid at the time | Very low |
| Corporate accounts | Monthly invoice, 30 days | Statements ignored or misrouted |
| Conferences and meetings | Deposit plus balance before or after the event | Final balance and extras paid late |
| Weddings and private events | Staged payments over several months | Missed interim payments |
| Agency bookings | Invoice to agency on agreed terms | Agency waits for its own client to pay |
Your rights when business customers pay late
When you invoice another business, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim statutory interest at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt, unless your contract already provides a substantial remedy.
The Act does not apply to consumers. For wedding couples and other private clients, rely on the payment and cancellation terms in your booking contract, and make sure those terms are clear and fair under consumer law.
This is general information, not legal advice.
Work out what you can claim with our late payment interest calculator.
Worked example (illustrative)
Hartley Brooks Ltd, a fictional corporate client, holds a two-day conference at a hotel. The deposit is paid, but the £6,200 final balance, including extra lunches and AV hire, is still outstanding 20 days after the 30-day due date.
An automated sequence sends a friendly reminder with a pay-now link, a firmer note a week later from the events manager's persona, and finally a notice that statutory interest and £70 compensation may apply. The balance is paid by card from the link. Figures are illustrative.
Keeping the relationship warm while you chase
Hospitality is a repeat business. The aim is to get paid and still win next year's booking. Keep reminders short and factual, thank the client for their event, attach the invoice and give one clear way to pay. Save firmer wording for accounts that have ignored several reminders, and always CC the person who made the booking so they can nudge their accounts team internally.
Credit control numbers worth tracking in hospitality
You do not need a finance team to measure credit control. Review these monthly:
- Total owed on corporate accounts and event balances.
- Amount more than 30 days overdue, and which accounts it belongs to.
- Average days to pay for your top ten corporate clients.
- Deposits and interim payments due in the next 60 days.
- Balances written off in the last year, and why.
How AutoSettle fits a hotel, venue or caterer
If your property management or events system posts invoices into Xero, QuickBooks or Sage, AutoSettle can watch every corporate account and event balance. It sends friendly reminders before interim payments and final balances fall due, and follows up with firmer messages only when needed.
Clients get a simple payment page for card or bank transfer. You choose the tone, so a long-standing conference client and a first-time party booker can be treated differently, and your team no longer has to chase by phone between shifts.
Frequently asked questions
Should hotels offer credit to corporate clients?
Credit accounts help win regular business, but set a credit limit, check the company first and agree payment terms in writing before the first stay.
How much deposit should a venue take for an event?
There is no legal standard. Many venues take a non-refundable deposit on booking with further staged payments. Set amounts that cover your committed costs and state them clearly in the contract.
Can I charge late payment interest to a wedding couple?
The Late Payment Act only applies between businesses. For private clients, rely on fair payment terms in your contract.
How do I chase a corporate account without upsetting the client?
Send a polite reminder before the due date, include the booking details and a payment link, and CC the person who booked. Escalate gradually only if reminders are ignored.
What if an agency says its client has not paid yet?
Your contract is with the agency, so the agency is responsible for paying on your agreed terms regardless of when its own client pays, unless your contract says otherwise.
Can AutoSettle chase invoices from my hotel accounting system?
AutoSettle connects to Xero, QuickBooks and Sage. If your property management system posts invoices into one of these, AutoSettle can chase them automatically.