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 Long Do You Have to Pay a Tradie Invoice?
In Australia, tradespeople typically expect payment within 14 days of the invoice being sent, unless otherwise agreed upon. If a client delays payment beyond this, the invoice becomes overdue, and you can consider charging late fees or pursuing legal action.
How Much Legally Can You Charge Someone for Paying an Invoice Late in Australia?
If late fees are specified in the contract, you can charge interest on overdue payments. Under the Interest on Overdue Accounts Act 1985, you’re entitled to charge interest on unpaid invoices, typically up to 10% per year.
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.
How to Deal with Clients Who Don’t Pay?
If a client isn’t paying, start by:
Sending a Reminder: Politely follow up with the client.
Formal Demand: Send a clear letter of demand if the client ignores your requests.
Debt Collection: If the client still refuses to pay, you can escalate to a debt collection agency or take legal action.
Before accepting a job, Feed4Ward helps you by letting you search client reviews to see if they’ve had a history of late payments. As a tradie, your rights include:
The right to claim interest on overdue payments.
The right to withhold services if the payment terms aren’t met.
The right to take legal action if the client refuses to pay.
Using Feed4Ward, you can check client reviews and avoid entering a job with clients who have a history of non-payment.
