The first technical concept to check is the credit term. This is the agreed period before payment falls due, such as seven or 30 days from invoice date, although the contract may use a different trigger. A due date is not automatically proven by the date printed on an invoice if the underlying agreement says payment follows acceptance or delivery. Check whether the customer received the invoice and whether the person who approved the work had authority to do so. A basic ledger should show the original amount, credits, part-payments, tax, disputed items and the current balance. Precision makes the next conversation much more productive.
A second concept is a disputed debt. A customer who says the work was incomplete, goods were damaged or an agreed credit was missed is not simply refusing to pay. For example, a Brisbane electrician may be owed $8,400, while the builder withholds $1,200 over a documented variation. The sensible approach is to isolate the disputed sum, collect the site records and ask for a clear response, rather than treating the whole account as one amount. An undisputed balance may still be recoverable, but the evidence and wording should reflect the actual disagreement. Labelling every late account as uncontested can weaken credibility.
Ageing also changes the practical approach. An accounts receivable report groups balances by how long they have been outstanding, often in bands such as current, 30 days, 60 days and over 90 days. That is not a legal test, but it helps identify patterns. A long-standing customer who misses one invoice may need a quiet account review, while a new customer who avoids every request deserves closer scrutiny. Contact notes should record dates, names, promises and explanations, not just say ‘chased’. If a payment plan is offered, record the instalments, dates and what happens if one is missed. Clear terms prevent a later argument about what was agreed.
A letter of demand is a formal written request for payment before court proceedings. In plain terms, it identifies the contract or invoice, states the amount claimed, sets a reasonable response period and explains the proposed next step. It is not the same as a court judgment, and sending one does not prove the debt. The wording should avoid threats, inflated fees or claims that cannot be supported. If the customer proposes a plan, assess whether the dates and amounts are realistic. A token first payment may show engagement, but it does not by itself resolve the balance or preserve every legal option.
Legal action is a process, not a collection tactic that guarantees payment. A claim generally requires identifying the correct legal entity, presenting the basis of the debt and serving documents according to the applicable court rules. If the customer fails to respond, a default judgment may be available, but obtaining judgment and recovering money are separate matters. If the debt is defended, the dispute may require evidence, negotiation or a hearing. Check the contract, limitation issues, court jurisdiction and likely costs with a qualified Australian legal practitioner before filing. The correct path depends on the facts, not simply on the size of the invoice.
The most useful handover usually contains the parties’ legal names and addresses, contract, invoices, delivery or completion proof, account statement, payment history and all material correspondence. A short chronology is often more useful than 80 pages of unlabelled email. It should explain when credit was granted, when the account became overdue, what was promised and why the present balance is claimed. Keep personal information secure and share only what is needed for the recovery task. If you are considering the debt recovery process, a clear file allows the next step to be assessed calmly, whether that means a structured approach, negotiation or legal advice.
