Quick answer
Chase unpaid invoices early, consistently and personally. Send a friendly reminder before the due date, a note the day after it passes, a phone call at around seven days overdue and a firm written follow-up at 14 to 21 days. Always ask for a specific payment date. Escalate to a formal demand, a payment plan or debt recovery only when the relationship has stopped responding.
Key points
- The earlier you follow up, the more likely you are to be paid — and the easier the conversation.
- Phone calls get dates; emails get ignored. Use both.
- Always finish a chase with a specific promise: an amount and a day.
- Keep notes of every contact — they matter if you ever need to escalate.
Nobody starts a business to become a debt collector. Yet in most small businesses the difference between a comfortable month and a stressful one isn’t sales — it’s whether last month’s invoices were actually paid. The good news: most late payers aren’t refusing. They’re disorganised, busy or waiting to see if you’ll notice.
Why do customers pay late?
Understanding the reason shapes the chase:
- The invoice never reached the right person. It’s sitting in a general inbox or with the site manager, not accounts payable.
- Something’s missing — a purchase order number, an ABN, a signed-off timesheet.
- They’re managing their own cash and paying whoever pushes hardest.
- There’s a dispute they haven’t mentioned.
- They’re in genuine trouble.
Your first follow-up is really a diagnosis: which of these is it?
What’s a good follow-up timeline?
A consistent sequence beats occasional bursts of frustration. Here’s a timeline that works for most service businesses:
| When | Action | Tone |
|---|---|---|
| Invoice day | Send invoice with due date and payment link | Routine |
| 3 days before due | Courtesy reminder email | Helpful |
| 1 day after due | “Just checking this came through” email | Friendly |
| 7 days overdue | Phone call; ask for a payment date | Direct |
| 14 days overdue | Written follow-up confirming the promised date | Firm |
| 21–30 days overdue | Pause further work (if terms allow); final notice | Formal |
| 30+ days overdue | Letter of demand, payment plan or recovery | Escalated |
Automate the early emails in your accounting software, but make the phone call yourself. A call from the owner lands differently to an automated reminder.
What should you actually say?
Day-after email: “Hi Sam, a quick note that invoice 1043 for $4,180 was due yesterday. I’ve attached it again in case it went astray. Could you let me know when it’s scheduled for payment? Thanks.”
Seven-day call: “Hi Sam, it’s Priya from the fit-out. I’m just following up invoice 1043 — has it reached accounts? … Great. What date should I expect it? … Thursday the 14th, perfect. I’ll pop that in an email so we’re both on the same page.”
Fourteen-day follow-up: “Hi Sam, following our call, payment for invoice 1043 was expected on Thursday 14th but hasn’t arrived. Please arrange payment by Tuesday 19th. If there’s a problem with the invoice, call me today and we’ll sort it.”
The names and amounts are illustrative. Notice the pattern: specific invoice, specific amount, specific date, and an easy way out if there’s a genuine issue.
How do you stop it happening again?
Chasing fixes the symptom. Prevention fixes the cause:
- Tighten payment terms and print a real due date on every invoice.
- Take deposits and progress payments on larger jobs.
- Ask new business customers for an accounts contact before work starts.
- Put overdue debtors on your weekly review — see our weekly money routine.
If slow payers are already squeezing your wage run, see what short-term funding you might qualify for — enquiring won’t affect your credit score.
What if they still won’t pay?
When promises are missed repeatedly, escalate in steps:
- Letter of demand. A formal letter stating the amount, the due date and what you’ll do if it isn’t paid by a new date.
- Payment plan. For customers in genuine difficulty, a written plan with instalments often recovers more than aggressive action.
- Debt collection agency or small claims. Each state and territory has a process for smaller debts. business.gov.au’s guide to what to do when you haven’t been paid is a sensible starting point.
Keep records of every invoice, email, call and promise. If it ever goes further, that trail matters.
What does a slow debtor book do to your borrowing?
Lenders reading your bank statements notice lumpy, late receipts. A business with steady weekly deposits looks more predictable than one with long gaps and big catch-up payments. Tighter collection doesn’t just improve cash flow — it makes your business easier to lend to.
How do you set up invoices so they get paid first?
Accounts payable teams pay the easiest invoices first. Make yours easy:
- Address it to the right person, and copy the accounts inbox if there is one.
- Quote their purchase order number and any job reference they use.
- Show a clear due date as a date, not “net 14”.
- Include a payment link or full bank details with a reference.
- Attach proof — signed timesheets, delivery dockets or photos of completed work — so nobody has to ask for it.
- Send it the day the work is done, while the customer still remembers the value of it.
These details sound small, but each missing one can add a week or more while someone chases it internally. Our guide to payment terms covers the wording to put on every invoice.
Don’t let one late payer set your pace
Even with a perfect process, you can’t control when a large customer’s payment run falls. If a handful of overdue invoices is holding up wages, stock or a BAS payment, funding can bridge the gap while your process does its job.
We look at trading businesses for unsecured and line-of-credit facilities typically from $5,000 to $500,000, and property-secured loans from $20,000 to $5,000,000. There’s no credit check at the enquiry stage, your details aren’t farmed out to a list of lenders, and a real person reviews your situation and phones you. Tell us accurately what you’re owed, by whom and roughly when — it helps us suggest the right structure straight away.
Frequently asked questions
How soon should I follow up an unpaid invoice?
A courtesy reminder two or three days before the due date works well, then a follow-up the day after it passes. Waiting 30 days before chasing tells the customer your invoices can safely wait.
What should I say when chasing payment by phone?
Keep it friendly and specific: confirm they received the invoice, ask if anything is holding it up, and ask when you can expect payment. Then repeat the date back and confirm it by email.
When should I stop work for a customer who hasn't paid?
If your terms allow it, pausing further work on an overdue account is reasonable, especially once a debt is more than a few weeks late and promised dates have been missed. Tell the customer clearly and in writing.
What can I do if a customer still won't pay?
Options include a formal letter of demand, offering a written payment plan, a debt collection agency or a small claims process in your state or territory. business.gov.au has a guide on what to do when you haven't been paid.
Should I write off a bad debt?
Sometimes chasing costs more than the debt is worth. Talk to your accountant: a debt that is genuinely bad and written off may be deductible, and GST you paid on the sale may be adjustable.