When an invoice remains unpaid, it can create a ripple effect on your business—delayed cash flow, stunted growth, and more. Tradesmen are entitled to payment as agreed upon in the contract. If no terms are mentioned, the standard payment period is typically 14 days from the date of the invoice. After that, it's considered overdue, and the tradesman can charge late fees or take legal action. If a client doesn’t pay after you’ve completed the work, take a quick, direct action. The first step is to follow up immediately. If that doesn’t work, escalate with a formal payment demand letter. If nothing happens after that, you might need to consider legal action or debt collection to recover your money.
What Happens If a Client’s Invoice Goes Unpaid?
When a client doesn’t pay, you’re left with a delayed cash flow that can hurt your business. Start by following up with the client, and if that doesn’t work, escalate to formal demands or legal action. The longer you wait, the more difficult it becomes to recover the amount owed.
How Much Legally Can You Charge Someone for Paying an Invoice Late in Australia?
You can charge late fees or interest on overdue payments. In Australia, if you’ve stated late payment fees in your terms, you can enforce them. Otherwise, you’re allowed to charge interest under the Interest on Overdue Accounts Act 1985—which is typically up to 10% annually.
How Long Can a Client Leave an Invoice Unpaid?
In Australia, clients typically have six years to settle unpaid invoices, depending on the terms of the agreement. However, it’s best to act quickly—delaying payment for too long could impact your ability to recover the funds, especially if you let the issue drag on for years.
Can a Client Get Sued for Not Paying an Invoice?
Yes, if a client refuses to pay, you have the right to take legal action. Failing to pay could result in a court judgment, interest charges, and even damage to their credit rating. It’s always best to take action quickly to avoid a lengthy dispute.
Can I Refuse to Pay a Late Invoice?
Refusing to pay an invoice isn’t advisable unless there’s a genuine issue (e.g., the work wasn’t completed as agreed). If you believe the invoice is incorrect, dispute it formally. Simply ignoring or refusing payment can escalate the issue and lead to legal complications.
How Far Back Can a Client Invoice You?
In Australia, a tradie can invoice a client for work completed up to six years ago, provided the work was agreed upon and completed. However, if an invoice wasn’t issued in a timely manner, it’s much harder to pursue payment later.