How to Chase an Unpaid Invoice in Australia
Most overdue invoices can be recovered with the right approach. Here is a practical, step-by-step process for chasing payment — with timing guidance at each stage.
Day 1 overdue: make the call
The moment an invoice is overdue, pick up the phone. Call the accounts payable contact (not sales or the person you normally deal with — AP is who authorises payment). Keep the tone professional: "I'm following up on invoice [number] for $[amount] which was due on [date]. I wanted to confirm you've received it and check when you're expecting to process payment." Note the name, date, time, and their response.
Day 1–3: written follow-up
Send an email the same day or next morning summarising the call. Subject line: "Invoice [number] — payment confirmation." Body: "As discussed today, invoice [number] for $[amount] due [date] is outstanding. You indicated payment would be made by [date]. Please let me know if anything is needed from my end to facilitate this." This creates a paper trail and applies soft accountability.
Day 7–14: reminder
If the promised payment date passes without payment, send another email. Keep the tone professional but note that the payment is now [X] days overdue. Reference the previous conversation. "Further to our discussion on [date], invoice [number] for $[amount] remains outstanding. Please advise when payment will be processed."
Day 14–21: formal letter of demand
If reminders have not produced payment, escalate to a formal letter of demand. This should: be addressed to the debtor's registered address; state the amount owed; reference the invoice and any agreed payment date; set a new deadline (typically 7–14 days); state that further action will be taken if payment is not received. A letter from a professional agency or solicitor carries significantly more weight than one from the creditor.
Day 30–45: refer to a recovery agency
If the letter of demand does not produce payment, it is time to refer the account. A professional commercial debt recovery agency will: verify the account details; make contact via multiple channels; negotiate payment or an instalment arrangement; document every contact for potential escalation. They charge commission only on amounts recovered — no upfront fee.
Timing matters
Recovery rates decline sharply as accounts age. An account that is 30 days overdue has a substantially higher recovery rate than one that is 120 days overdue. Escalating earlier improves outcomes. The most common mistake SMEs make is waiting too long before involving a professional.
Frequently asked questions
How many follow-ups should I do before escalating?
Two to three direct follow-ups (call + email + reminder) over 14–21 days. If payment has not been received and no credible payment plan is in place after that, escalate. Further self-chasing beyond this point rarely adds value and costs you time.
Should I stop supplying a customer who hasn't paid?
Putting a customer on credit hold while an account is overdue is reasonable business practice. It protects you from further exposure while the existing debt is being recovered. Consult your terms of trade — many include a right to suspend supply on overdue accounts.
Can I charge interest on overdue invoices?
Only if your terms of trade specify it. A penalty interest clause needs to be in your written terms, disclosed to the customer before the transaction, and at a rate that is not unconscionable. If your terms are silent on interest, you generally cannot charge it unilaterally.
Ready to recover your debts?
Refer an account today. No upfront fee, no lock-in — commission only if we recover.