How to chase unpaid invoices as a tradie in Australia

Late payment is normal, so plan for it

If you feel like you’re always waiting on money, you’re not imagining it. The Australian Government’s Payment Times Reporting Regulator found only 68.5% of invoices that big businesses owed small suppliers were paid on time in July to December 2025. In its own words, “most small businesses can expect to wait almost double the agreed payment term to be paid.”

Construction is among the worst. Only 57.4% of construction invoices were paid within 30 days, the lowest of any industry in the report, and 1 in 20 took 62 days or more.

It isn’t only big companies. Xero’s data shows Australian small businesses were paid an average of 6.0 days late in the June 2026 quarter, and a Xero survey in March 2026 put the average loss from late payments at $15,257 over the last financial year.

Set it up before you start the job

Most of the fight is won before you pick up a tool. Customers pay faster when they know exactly what they agreed to.

• •Agree payment terms in writing before work starts: the due date, how they pay, and what happens if they pay late (business.gov.au).
• •Consider shorter terms, such as 14 days instead of 30, and invoice the same day the job is finished.
• •Put a pay link or bank details on every invoice so paying takes ten seconds.
• •Only charge interest or a late fee if it was in the terms agreed before the job. A late fee should reflect a genuine cost to you, not a penalty.
• •Watch your standard terms. Since 9 November 2023 it has been illegal to use unfair terms in standard form contracts with consumers and small businesses, and the penalties for companies run to $50 million or more.
• •For home building work, take only the deposit your state allows (see the table below).

Get the invoice right first time

An invoice with something missing gives a slow payer an excuse. If you’re registered for GST, a tax invoice needs to show it’s a tax invoice, your business name and ABN, the date, what you did (with quantity and price), and the GST. For sales of $1,000 or more it also needs the customer’s name or ABN.

If you’re not registered for GST, don’t call it a tax invoice. Either way, always quote your ABN: a business customer may have to withhold 47% of the payment if you don’t.

A reminder routine that works

Xero suggests a polite reminder 1 to 3 days after the due date, a phone call or formal reminder if nothing happens within 14 days, and a letter of demand after 30 days. Here’s that routine laid out day by day.

The contact rules you have to stay inside

The ACCC and ASIC debt collection guideline applies to businesses collecting their own debts, not just debt collectors. It sits on top of the Australian Consumer Law, which bans undue harassment and coercion when you ask for payment.

• •No more than 3 contacts a week, or 10 a month, per account. That counts real contact, not attempts, but constant missed calls can still be harassment.
• •Face-to-face visits no more than once a month.
• •No contact on national public holidays such as Christmas Day, Good Friday and Anzac Day. In South Australia, no calls demanding payment on any public holiday.
• •If they ask for a different way to be contacted and give you one, use it.
• •In Victoria, if they ask in writing for no further contact, stop.

When to send a letter of demand

A letter of demand is a formal, final request before you take further action. business.gov.au has a free template. Say what’s owed, what it’s for and the date you need it paid by (7 days is common). Attach the invoice, the contract and your earlier reminders, and keep copies.

Only mention action you’re genuinely prepared to take, keep it polite, and make sure nothing in it is false or misleading. Only include interest if it was in your agreement.

Construction work: Security of Payment

Every state and territory has a Security of Payment Act for construction work. You serve a payment claim, the other side has a set time to reply with a payment schedule, and if they don’t, they’re generally liable for the full amount. Disputes go to fast adjudication.

The catch for small residential tradies: most states exclude or limit jobs where you contract directly with a homeowner who lives there. It works best for subcontractors and commercial work.

Small claims: where to go and how much

Where AI staff fit

The routine above is simple. The hard part is doing it every week when you’re flat out. That’s the job LeadAI’s AI staff take on: SAM writes the invoice while you talk it through, and Carol chases deposits before the job goes in the diary, sends the reminders you’ve approved and checks what’s been paid.

You set the wording, the timing and how often they follow up. Disputes, payment plans and write-offs always come back to you. Carol is part of the Growth plan, which is five AI staff for $950 a quarter plus GST, about $2.08 a day each.