How Big Is the Problem?
Late payments are a genuine crisis for trade businesses. According to research by Xero, small businesses in Australia are owed an average of $38,000 in outstanding invoices at any one time. For trade businesses with tight cash flow and large material costs, even a handful of overdue invoices can put serious pressure on operations.
The most common reasons clients don't pay on time:
- They forgot (genuinely)
- Your invoice got lost or went to spam
- They're waiting on their own cash to come in
- They're disputing something about the job (even if they haven't told you)
- They're chronic late payers who push every supplier
Knowing which situation you're dealing with will change how you approach the conversation.
Prevention: The Best Cure for Unpaid Invoices
Before we get to chasing, let's talk about the conditions you set before the job starts. Most unpaid invoice problems are actually created before a single tool is picked up.
1Set clear payment terms upfront
Include your payment terms on every quote and every invoice. "Payment due within 7 days of invoice" is clearer and more enforceable than "payment on completion." If you accept certain payment methods, say so.
2Take a deposit on larger jobs
For any job over $1,500–$2,000, it's entirely reasonable to ask for a 30–50% deposit before work starts. This filters out non-serious clients, covers your materials, and gives you leverage if the relationship sours.
3Invoice immediately after the job
The longer you wait to send an invoice, the longer you wait to get paid. If possible, send the invoice on the day the job is completed — or even better, before you leave the site using your phone.
4Make it easy to pay
Include your BSB and account number, a payment link, or a QR code. Every extra step between "I want to pay" and "I've paid" costs you money.
The Follow-Up Sequence: What to Send and When
When an invoice goes unpaid, most tradies either do nothing (and stew about it) or jump straight to an aggressive phone call. Neither works well. Here's a structured approach:
DAY 1 AFTER DUE DATEFriendly Reminder
Assume good faith. Invoices get missed. Send a brief, warm message via text or email — whichever channel you normally use:
"Hi [Name], just a friendly reminder that invoice #[number] for $[amount] was due on [date]. Happy to help if you have any questions. Bank details are on the invoice. Thanks!"
Keep it short and non-confrontational. Most invoices get paid after this message.
DAY 5–7Follow-Up Call
If there's been no response, call them. Don't leave a message if you can help it — call until you get them on the phone. Keep the tone matter-of-fact, not aggressive:
"Hey [Name], it's [Your Name] from [Business]. Just calling about invoice [number] — it's come up a week overdue. Wanted to check in and make sure everything's okay and you're happy with the work."
If they're happy with the work but just haven't paid, ask directly: "Are you able to get that across today or tomorrow?" Get a commitment. If they raise an issue, take it seriously — a disputing client isn't necessarily a non-paying one.
DAY 14Formal Written Notice
If you still haven't been paid and haven't received a satisfactory explanation, escalate in writing — calmly and professionally. Send by email so you have a paper trail:
"Hi [Name], I'm writing regarding invoice #[number] for $[amount], now 14 days overdue. Per our agreed payment terms of 7 days, this amount was due on [date]. Please arrange payment by [date — give 5 business days] to avoid further action. If there's an issue with the invoice or the work, please contact me directly so we can resolve it."
DAY 21+Final Notice and Escalation
If payment still hasn't arrived and communication has broken down, you have several options:
Option ALate payment fees — If your terms include a late payment fee (which they should), apply it and reissue the invoice. A standard late fee is 1.5–2% per month on the outstanding amount.
Option BDebt collection agency — Specialist trade debt collection agencies operate on a "no collection, no fee" basis. They typically take 15–25% of what's recovered. For invoices over $1,000–$2,000 that you've been unable to collect, this is often worth it.
Option CQCAT / VCAT / NCAT (State Tribunals) — For amounts under $25,000 (varies by state), you can apply to your state's civil and administrative tribunal. The process is relatively simple, low-cost, and doesn't require a lawyer. This is a legitimate option and more effective than most people realise.
Option DPPSR (Personal Property Securities Register) — If you supplied materials for a job and haven't been paid, registering a security interest via the PPSR can give you legal rights over those goods. Talk to your accountant about whether this applies to your situation.
How to Have the Money Conversation Without Losing the Client
Most tradies avoid following up because they're worried about damaging the relationship. Here's the truth: a client who values your work will pay you. A client who gets defensive or hostile when you professionally ask for what you're owed was never a great client to begin with.
You're running a business, not a charity.
Your labour, time, and materials have real costs. Following up on an overdue invoice is not rude — it's professional.
The client isn't the only one with a relationship to protect.
They need good tradespeople too. Most reasonable clients will respect you more, not less, for following up promptly and professionally.
Don't apologise for asking.
Phrases like "sorry to chase" or "I hate to bug you" undermine your position. Be polite, be direct, don't apologise.
Protecting Yourself Going Forward
Once you've been through the experience of chasing an unpaid invoice, it's worth putting systems in place so it happens less often. The most effective things you can do:
- Use job management software to send invoices immediately from the job site
- Set up automatic payment reminders (7 days before due, on the due date, and 3 days after)
- Require deposits on large or unfamiliar clients
- Keep a note on any client who has paid late before — and adjust your terms accordingly
- Never start a second job for a client who still owes you money from the first
TradeTrack makes it easy to send invoices on the spot and automate follow-up reminders — which means fewer invoices slip through the cracks, and you spend less time chasing and more time working.
Key Takeaways
✓Prevention is cheaper than collection — set clear terms, take deposits, and invoice immediately
✓Follow a structured sequence: reminder, call, written notice, escalation
✓Stay professional and calm throughout — it's more effective and keeps the door open
✓You have real legal options if a client refuses to pay
✓Build systems that reduce late payments in the first place
Cash flow is the lifeblood of a trade business. Don't let unpaid invoices drain it.