Free tool
Build the formal letter and final notice. The payment reminder generator covers the first friendly email.
Why it matters
Late payers are usually not bad payers. The invoice was lost, stuck in approval or forgotten. A fast, polite follow-up solves most cases.
A fixed schedule means the job gets done. Without one the oldest invoices sit while the work piles up.
The steps
- Check the invoice first. Is it correct, sent to the right person and not in dispute? Fix any error before you chase.
- Send a reminder the day after the due date. Keep it short and friendly. Attach the invoice and give the payment details.
- Phone within a week. Ask if there is a problem. Ask for a payment date. Write the date down.
- Send a formal letter at two weeks. State the amount, the due date and the new date you expect payment. Say what happens next.
- Send a final notice at four weeks. Say you will pause supply or pass the debt to a collector if payment is not made by a set date.
- Offer a payment plan. If cash is the issue, agree instalments in writing. Get the first payment up front.
- Escalate. Stop credit, use a collection agency or start formal recovery. Get advice before you start legal action.
- Record each contact. Log the date, the person and what was said. You need this if the debt goes further.
Worked example
Example Plumbing Supplies Pty Ltd invoices Example Builders for A$6,600 on 1 September with 30-day terms. The due date is 1 October.
| Date | Action |
|---|---|
| 2 October | Friendly email with the invoice attached |
| 8 October | Phone call, customer promises payment on 15 October |
| 16 October | Formal letter after the promised date is missed |
| 29 October | Final notice with a payment deadline of 5 November |
The customer pays A$3,300 on 4 November and agrees to pay the rest in 14 days. The first payment arrives 34 days after the due date and every step is on record.
Common mistakes
- Chasing without checking the invoice.
- Waiting more than a week to follow up.
- Threatening action you will not take.
- Not keeping notes of calls.
Next step
Use the Collection letter generator first. Then see how to send customer statements.
Common questions
When does an invoice become overdue?
The day after the due date on the invoice.
Can I charge interest on a late invoice?
Only if your terms of trade or your agreement with the customer allow it. Check your terms first.
When should I stop supply?
When the final notice date passes with no payment or plan. Tell the customer first.
Related how-to guides
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