Once bitten twice shy I now have a clause in my terms and conditions which states that late payment will inccur an administration charge of £25. This is reinvoiced and continues each month until it is paid or reaches an amount sufficient to take to small claims court. Most of the time people will pay after the first admin charge although they will try and get away with paying just the original amount. I usually let it go once the initial invoice has been paid and forget the admin charge but its deffinetly a rocket up the preverbial in most cases.
If you have supplied plants or materials in a construction of some sort and no payment has been made at all remove what you put in, or just walk away and put it down to experance. on average we have one a year, i tried the small claims court but that was for me a waste of time and money as they still didnt pay. We are now taking a deposit up front or on the day we arrive to start, because at presant clients are waiting as long as possable to pay there bills it has played hell with my cash flow but it seem to becoming right at last
I hardly ever have contracts with my clients either - trust on both sides seems to work most of the time. But I agree with the comment below about people taking their time paying. It has happened to me so much this year. I get the money in the end but it sometimes takes a couple of months. I've started adding 'please pay within 21 days' to invoices but it doesn't make much difference and I still have to waste time following it up.