How to chase an unpaid invoice in NSW, without losing the client

Why invoices go unpaid

Getting paid has become the biggest problem in the trades. ServiceTitan’s 2026 State of the Trades report found 57% of Australian trade operators now name billing and accounts receivable as their number one pain, up from 20% a year earlier. CreditorWatch’s September 2026 figures put about one in ten Australian invoices more than 60 days overdue, with construction getting worse fastest.

Very few of those invoices are true disputes. Late payment usually comes down to one of four things:

• They forgot. The invoice got buried under school emails and bills.
• Paying was awkward. No pay link, missing bank details, or an invoice addressed to the wrong person.
• Cash flow. They’re waiting for payday or for an insurer.
• They’re unhappy with something. A mark on the wall, a leak that came back, or a bill bigger than they expected.

The first three are fixed by a clear reminder at the right time. The fourth needs a conversation, not another reminder.

Set it up before the job

The easiest chase is the one you never have to make. Before you start:

• Put the due date on the quote and the invoice. 7 or 14 days is common for residential work.
• Make paying easy. A pay link for card payments, your bank details and an invoice number to use as the reference.
• Take a deposit on acceptance. In NSW the deposit for residential building work is capped at 10% of the contract price. See our guide to deposits and variations.
• Get extras signed. Unsigned variations are the most common reason a final invoice gets disputed.
• Check the client’s mobile and email. A typo in an email address can cost you weeks.

A chase schedule that works

Days count from the due date. Each message goes out in your business name and gets a little firmer, never rude.

Two rules make this work. Stop the moment payment lands, and check before every message. Bank transfers can take a day to show in Xero, and chasing someone who has already paid is the fastest way to lose a good client.

Example messages

Use your own words, but keep them short, specific and polite. These examples use a made-up business.

Staying inside the rules

The ACCC and ASIC publish a Debt collection guideline: for collectors and creditors. It explains how consumer law applies to anyone recovering a debt from a consumer, including a business chasing its own customers. Most of your clients are homeowners, so treat it as your rulebook.

• Keep contact practical. Guidance on the guideline suggests no more than three letters or calls a week once you’ve made contact. Excessive contact can count as harassment.
• Be accurate. State the right amount and only mention next steps you’re genuinely prepared to take.
• Keep it between you and the client. Don’t discuss the debt with neighbours, family or their employer.
• Keep a record. Date, time, channel and what was said for every contact.

When the client disputes the work

If the client says something is wrong, stop chasing the disputed amount and switch to fixing the problem.

• Ask them to explain the problem in writing, with photos if they can.
• Offer to come back and look. Small fixes often unlock the whole payment.
• Ask them to pay the part of the invoice that isn’t in dispute.
• Keep your evidence together: the quote, any signed variations, photos and messages.

What to do after day 21

If the reminders and the call haven’t worked, these are the usual next steps, from lightest to heaviest:

1. A written payment plan. Weekly amounts and dates, agreed by both of you.
2. A letter of demand from a lawyer. It shows you’re serious and sets a deadline before legal action.
3. NSW Local Court, Small Claims Division. It hears claims up to $20,000 and is less formal than other courts. Claims over $20,000 and up to $100,000 go to the General Division.
4. A collection agency. Typically paid a commission of around 10% to 30% of what they recover.
5. Write it off. Sometimes the time is worth more than the debt. Talk to your accountant about the tax treatment.

At Tradie Quo our chasing stops at the day 21 call. After that, you decide, and we can refer you to a licensed partner.

Can you charge interest or a late fee?

Only if your terms said so before the job started, and the client agreed to them. Adding a fee after the fact is likely to start an argument and may not be enforceable. If you want late fees, put them in your quote and contract terms and have a lawyer check the wording.

FAQ