How to Chase Unpaid Invoices (Without Losing the Client)

Late payment is one of the biggest cash flow problems for sole traders. The good news is that most overdue invoices are not a dispute, just an oversight, and a clear process gets most of them paid without damaging the client relationship.

Prevent late payment before it happens

• Invoice promptly. Send the invoice as soon as the work is done, not at the end of the month.
• Set clear terms. State a due date on every invoice. Seven or 14 days is common for sole traders, and 30 days is typical when dealing with larger companies.
• Make paying easy. Put your bank details on the invoice.
• Get terms agreed up front. A short written quote or agreement that mentions payment terms, and any late fee, avoids arguments later.
• Get the details right. A missing ABN or purchase order number can stall payment in a client's accounts team. See our invoice checklist.

A simple follow-up schedule

1. A few days before the due date: an optional friendly heads-up for large invoices or new clients.
2. The day after the due date: a short, polite email with the invoice attached. Assume it was missed.
3. One week overdue: a second email or a phone call. Ask when you can expect payment and note it down.
4. Two to three weeks overdue: a firmer written reminder stating the amount, the original due date and a new date by which you expect payment.
5. Still unpaid: consider pausing further work and sending a formal letter of demand.

Example reminder email

Hi Sam, I hope you are well. I am following up on invoice INV-0042 for $1,100.00, which was due on 14 March. I have attached a copy in case it has been misplaced. Could you let me know when I can expect payment? Thanks so much, Alex

Late fees and escalation

You can usually only charge a late fee or interest if it was agreed in writing before the work started, so put it in your terms from the beginning. If a client still will not pay, options include a formal letter of demand, a debt collection service, or a claim through your state or territory's small claims tribunal. The rules and limits differ across jurisdictions, so seek advice before taking legal action.

Stay on top of what is outstanding

The hardest part of chasing invoices is remembering which ones are overdue. With Sole Invoice, every invoice is stored against its client, and your dashboard shows what is outstanding, so nothing quietly slips through the cracks.

This article is general information only and is not legal advice.