The playbook
Seven steps from overdue to paid.
A steady, documented process wins. Here is the rhythm we would follow.
General information only, not legal or financial advice. Every business and every debt is different. For advice on your situation, talk to a lawyer, your accountant or your state small business commissioner.
- 1
Before you send the invoice
Prevention beats cure. Agree payment terms in writing before you start: due date, accepted payment methods, and what happens if payment is late. Check you have the right legal entity name and ABN (look it up on the ABN Lookup). Put the due date as an actual date, not just "30 days". Make the invoice dead easy to pay: bank details, reference number and a contact person.
- 2
Day 1 overdue: a friendly nudge
Send the polite reminder. Assume it was an oversight. Re-attach the invoice, state the amount and the original due date, and ask them to let you know if anything is holding it up. Keep it short. A three line email gets read; a three paragraph one gets filed.
- 3
Day 7: pick up the phone
A call is ten times harder to ignore than an email. Use the phone script. Your goal is a specific promise: an amount and a date. Write it down, then confirm it by email the same day so there is a paper trail.
- 4
Day 14: the firmer follow-up
If the promise was broken or you heard nothing, send the firmer follow-up. Still polite, but now you are clear about the impact and you ask for payment by a fixed date. If you have terms that allow it, this is when you can pause further work or supply. Only say you will do things you are actually prepared to do.
- 5
Day 21 to 30: offer a way out
If they genuinely cannot pay in full, a realistic payment plan beats a court fight. Use the payment plan note to lock in amounts, dates and what happens if a payment is missed. Small, regular and automatic is better than big and hopeful.
- 6
Day 30+: final notice
Send the final notice before further action. Spell out the amount, the deadline (usually 7 to 14 days), and the next step you will take: a formal letter of demand, referral to a collection agency, or a claim at your state tribunal or court. Keep copies of everything.
- 7
Next steps if they still will not pay
Your options are: a formal letter of demand, your state small business commissioner (free or low cost mediation), a licensed collection agency, a small claims tribunal or local court, and for larger debts, insolvency processes through AFSA (individuals) or ASIC guidance (companies). Weigh the cost and time against the amount owed. Sometimes writing off the debt and claiming the tax adjustment is the right commercial call. Talk to your accountant.
Do
- Keep every reminder in writing, even after a phone call
- Be specific: amount, invoice number, due date
- Chase the person who approves payments, not just accounts@
- Stay calm and courteous, every single time
- Note every promise and every broken promise with dates
Do not
- Threaten action you have no intention of taking
- Contact people at unreasonable hours or too often
- Tell anyone else about the debt (privacy matters)
- Add fees or interest that are not in your agreed terms
- Pretend to be a lawyer, court or collection agency
The rules for contacting people about debts are set out in the ACCC and ASIC debt collection guideline. They apply to businesses collecting their own debts too, particularly where the customer is an individual.