How to chase a late invoice in Australia: the complete playbook

To chase a late invoice in Australia, run a fixed reminder schedule: a friendly nudge about a week after the due date, a firm follow-up at two weeks with a new pay-by date, a final notice at three to four weeks, then a letter of demand and small claims as a last resort. Scripts, the schedule and the legal steps are below.

Late payment is the norm, not a sign you did something wrong: around 44% of small-business invoices are paid late, and the Payment Times Regulator reported in July 2025 that the median Australian small business waits about 37 days from invoice to money. Chasing is a normal part of the job. Here is the ladder, bottom rung first.

Chase on a schedule, not on a mood#

The biggest upgrade to getting paid is deciding the schedule once, so each reminder stops being a fresh decision. Chasing feels like conflict, so it gets put off, and the putting-off is the actual problem: is it too soon, will they be offended, what do I even write? A fixed schedule answers all of that in advance. The timing decides when, the script decides what, and you stop composing awkward messages at 9pm.

There is a second benefit nobody expects: it stops being personal. "That's just my process" is easier to send, and easier to receive, than a message the client can tell you agonised over. Nobody reasonable is offended by a business that runs like a business. Consistency beats confrontation, and a fast first nudge quietly teaches every client that your invoices do not drift.

Step 1: The friendly nudge (about a week overdue)#

The first reminder assumes the best, because the most common reason an invoice is unpaid is that someone forgot. Send it short and warm, roughly three to seven days after the due date:

Subject: Invoice #214 for the deck repair

Hi Sarah,

Just a quick one, invoice #214 for $1,850 was due on the 4th and I haven't seen it come through yet. No stress if it's already on the way. The details are on the invoice, and sing out if you need me to resend it.

Cheers, Dave

That is the whole move. No guilt, no legal words, an easy out if they have already paid. Most invoices get paid at this step, which is why skipping it and going straight to stern is a mistake.

Step 2: The firm follow-up (about two weeks overdue)#

The second message stays polite but stops being casual, and it does two specific jobs: it sets a new concrete date, and it asks directly if something is wrong.

Subject: Overdue: invoice #214, $1,850

Hi Sarah,

Following up on invoice #214 for $1,850, now two weeks past its due date of the 4th. Could you arrange payment by Friday the 25th?

If there's an issue with the invoice or anything holding it up on your end, let me know and we'll sort it out.

Thanks, Dave

The "anything holding it up?" line matters. It surfaces real problems (a disputed item, their own cash flow) while there is still goodwill, and if it later comes to formal steps, you can show you asked. Send it as a reply on the same thread so the history is in one place.

Step 3: The final notice (three to four weeks overdue)#

The final notice is calm, specific and states what happens next, because vague threats read as bluff. Around the three to four week mark:

Subject: Final notice: invoice #214, $1,850

Hi Sarah,

Invoice #214 for $1,850 is now four weeks overdue despite two reminders. Please pay by Friday the 8th.

If I haven't received payment by then, I'll need to take further steps to recover the amount, which may include a formal letter of demand. I'd much rather sort it out before that.

Dave

Only say it if you mean it. An empty deadline teaches a slow payer that your deadlines are decorative, which makes the next invoice slower too.

The whole ladder on one card#

Here is the full system in one table, small enough to screenshot:

Adjust the day numbers to your trade and your payment terms; if your market runs on 14-day terms and long relationships, a day 5 or day 7 first nudge is fine. What matters is that each number is fixed and you always act on it. Three reminders with rising firmness and fixed triggers, then the formal steps below.

Can you charge interest or late fees? The honest answer#

There is no general Australian law that lets you add interest or a late fee to an overdue invoice. You can only charge it if your terms said so in writing before the work started, in the quote or contract the client accepted. Deciding at week three that a 10% late fee feels fair is not enforceable, and springing one on a client usually hardens them rather than moving them.

(There are narrow exceptions, such as interest under Security of Payment legislation for certain building and construction work; that is state-specific territory to check for your situation.) One accounting quirk if you do validly charge interest: penalty interest is input-taxed, so no GST applies on the interest itself. The real lesson is for next time: put late-payment terms in your quote, then they are enforceable. What to put on an invoice covers getting the payment terms right up front.

The letter of demand (formal, but you can do it yourself)#

A letter of demand is a formal written demand for payment before court, and you do not need a lawyer to send one. business.gov.au provides a free template. It states the amount, the history (invoice date, due date, the reminders you sent), a deadline of usually 7 to 14 days, and that you may commence recovery action if it passes.

Send it by registered post so there is proof of delivery, and keep a copy. Two things happen when a letter of demand lands: casual non-payers realise you are serious and pay, and genuine disputes surface in writing. Either way you are better off. Keep the tone factual, not angry; this letter may one day be read by a tribunal member.

Mediation and small claims (the last resort)#

If the letter of demand passes unanswered, the path is mediation or your state's small claims process, and for tradie-sized debts it is more accessible than most people think. Every state and territory has a small claims tribunal or court division (NCAT in NSW, VCAT in Victoria, QCAT in Queensland, and equivalents elsewhere) designed for people without lawyers. Claim limits and fees vary by state, so check your tribunal's site; filing fees for small debts are typically modest.

Before filing, look at your state's small business commissioner or a community justice centre for low-cost mediation; a mediated payment plan is often faster than a hearing. And weigh it commercially: a tribunal can order payment, but enforcing an order against someone with no money is its own saga. Sometimes the right business decision is a payment plan, or writing it off and never working for them again.

Make it a weekly habit, not a guilt spiral#

The system only works if it runs, so give it one admin slot a week, same day, same time. The uncomfortable truth about "late payers" is that a lot of them are really unchased invoices; the tradie was flat out on the next job and the reminder never got sent. The weekly routine is three steps: pull up your list of unpaid invoices, check each one's days overdue against the schedule, and send whichever step each is due for using the scripts above. Ten minutes, done.

The step that breaks for most tradies is the first one: knowing what is outstanding without digging through a sent-items folder and a bank app. That is where Chippie fits. Your invoices sit in one list with their status visible at a glance, so the weekly sweep starts with the answer instead of an investigation, and the free tier covers a solo operator. Fewer invoices go overdue in the first place when the invoice itself is right and it goes out the day the job finishes.

FAQ#

Can I charge interest on a late invoice in Australia? Only if your written terms said so before the work started. There is no general right to add interest or late fees after the fact, though narrow exceptions like Security of Payment interest exist for some construction work.

What is a letter of demand and do I need a lawyer? A formal written demand for payment, usually the last step before legal action. You do not need a lawyer; business.gov.au has a free template. Send it by registered post and keep a copy.

How long should I wait before chasing an unpaid invoice? About a week past the due date for a friendly reminder, two weeks for a firm follow-up, three to four weeks for a final notice. Waiting months makes recovery harder and signals your due dates are optional.

Can I take a client to court over an unpaid invoice? Yes, through your state's small claims tribunal (NCAT, VCAT, QCAT and equivalents), which is designed for self-represented people. Check your state's claim limit and fees, and consider mediation first.

What if the client disputes the invoice? Deal with the dispute on its merits before escalating. Ask what the issue is in writing, check it against your quote and any variations, and fix genuine errors fast. A disputed invoice chased as if it were simple non-payment tends to end up in a tribunal.

Chasing gets easier when nothing slips through. Chippie's free tier keeps every invoice and its status in one view, so you always know who owes what before it gets awkward.