Chasing late invoices: what a tradie can do

The short answer: check what your contract or invoice says about when you should have been paid, remind the customer, then send a letter of demand. If that doesn’t work, use free dispute help or mediation before paying for a debt collector or going to a tribunal. If the job was construction work, your state’s security of payment law may give you a faster way to get paid.

Start before the job: make late payment harder

Most chasing is prevented on the quote. business.gov.au recommends a good invoicing system, clear payment terms and a signed contract. For a tradie that means:

• Payment terms on the quote, accepted by the customer before you start. See how to write a trade quote.
• A deposit on bigger jobs, and progress payments on longer ones.
• An invoice sent the day the job is done, with a clear due date. See tax invoice requirements.
• An easy way to pay, such as a card payment link on the invoice.

When an invoice is overdue

1. Check the terms

Confirm the date the customer should have paid, and how. Make sure the invoice actually reached them and nothing on it is wrong. A missing purchase order number or wrong address is a common, fixable reason a business customer hasn’t paid.

2. Remind them

Contact the customer by phone, email, letter or in person. Keep it friendly and ask directly whether there is a problem. A short record of each contact (date, who you spoke to, what they said) helps if it goes further.

3. Send a letter of demand

If reminders don’t work, send a formal letter of demand: the amount owed, what it is for, the invoice number, a final date to pay, and what you will do if they don’t. Only state a next step you are prepared to take.

4. Get free dispute help

If the customer disputes the work or the amount, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has a free online Dispute Support tool that points you to the most suitable low-cost dispute resolution service. Mediation, where a neutral person helps you and the customer reach an agreement, is usually far cheaper and quicker than court.

5. Use a debt collector, or go to a tribunal

You can hand the debt to a collection agency; the ACCC publishes guidelines on what debt collectors can and can’t do. Or you can make a claim yourself in your state’s small claims tribunal or court. The name, the dollar limit and the fees differ by state, so check your state’s tribunal before you file.

Construction work: security of payment

If the job was construction work, your state’s security of payment law may give you rights that ordinary debts don’t have, including making a formal payment claim and, if it is disputed, fast independent adjudication. The details and deadlines differ between states, so check your state’s building regulator.

NSW is an example. Its Building and Construction Industry Security of Payment Act 1999 now also covers owner occupier construction contracts, meaning work on a home where the owner lives or intends to live. A homeowner who receives a payment claim can reply with a payment schedule stating what they will pay and why, within 10 business days of receiving the claim. Deadlines matter: missing one can lose you the right to adjudication.

Late invoice checklist

• Payment terms agreed on the quote before work starts.
• Invoice sent on the day, with a due date and an easy way to pay.
• Invoice details checked: right customer, address and their PO or reference.
• Reminders logged with dates and what was said.
• Letter of demand with a final date and a next step you will follow through.
• ASBFEO Dispute Support or mediation before paid options.
• For construction work: your state’s security of payment rules and deadlines checked early.