Chasing Unpaid Invoices: A Tradie's Playbook (2026)
Chasing unpaid invoices is the most emotionally expensive admin task a tradie does. Most owners avoid it until the debtor is 60+ days overdue, by which point the probability of collection has collapsed and the relationship is already cooked. This playbook replaces that pattern with a staged, mostly automated process — the same one that big service businesses use — so debt never ages past a month without action.
The 5-stage invoice chasing playbook
Every tradie business should have this process running automatically. Stages 1–3 are cheap, friendly, and recover 85% of genuinely overdue invoices. Stages 4–5 are only for the stubborn minority.
Debt collector vs tribunal vs Security of Payment
By day 30 you need to pick a path. The right one depends on who owes you money and how much.
- Debt collector (mercantile agent) — Best for residential debts under $5,000. Commission is 15–30% of recovered amount. Fast, low admin load. Examples in AU: PDC Recoveries, Prushka, ARL Collect. You keep the relationship at arm's length and the collector absorbs the emotional load.
- State tribunal (NCAT, VCAT, QCAT, etc.) — Best for $5,000–$25,000 residential or commercial. Designed for self-represented parties. Filing fees are modest ($50–$300). Takes 4–12 weeks. Judgment is enforceable.
- Security of Payment Act adjudication — Best for subcontracted construction work of any size. Requires a valid payment claim under the Act in your state. Adjudication decisions usually take 10–20 business days and are enforceable like a court judgment. Significantly faster than tribunal for construction disputes.
- Court (Magistrates / Local / District) — Last resort. Only worth it for large, complex, or disputed claims where tribunal jurisdiction doesn't cover the amount.
The best collection is the one you didn't have to do
Most unpaid invoices are preventable. Tradies who rarely have debt problems share three habits:
- They take deposits. Any job over half a day gets a 10–30% deposit upfront. Deposits aren't just cashflow — they filter out bad payers before the work starts.
- They send the invoice the day the job finishes. Not the end of the week. Not month-end. The same day. Every day you delay the invoice is a day added to your average collection time.
- They automate stages 1–3 of the chasing playbook. Xero reminders, ServiceM8 automations, or a VA running the process means debt never ages past 14 days without touch.
Set the right payment terms in your quote, take the deposit through a proper payment processor, and let a trained VA run the chasing process. Days-to-pay will drop inside a month.
Stop carrying the emotional load of debt chasing.
Automate stages 1–3, outsource stages 3–4 to a VA, and escalate stage 5 to a debt collector. The owner should only be involved when the dispute is genuine.
Read the VA outsourcing playbook →Frequently Asked Questions
Use a staged escalation: friendly SMS at day 1, firmer email at day 7, phone call at day 14, letter of demand at day 21, external action at day 30. Most invoices pay at stages 1–3. Automate the first three steps so they fire every time.
Debt collectors for residential under $5,000 — commission-based (15–30%), low admin load. State tribunals (NCAT, VCAT, QCAT) for $5,000–$25,000. Security of Payment adjudication for construction subcontract work. Court only as last resort.
Yes if interest was stated in your quote or terms before work started. Standard clause is 1.5% per month on overdue amounts. You can't add interest retrospectively. Under SOPA, subcontractors have statutory interest rights on overdue construction progress claims.
A formal written notice stating the amount owed and giving a deadline (7–14 days) before further action. You don't need a lawyer — self-sent works. Lawyer letterhead gets faster responses but costs $100–$400. For smaller residential debts, self-sent + debt collector is usually enough.