Debt Recovery for Tradies: From Invoice to Tribunal in 6 Steps

You finished the job. The client’s happy. The invoice went out weeks ago. Nothing.

You send a polite reminder. Still nothing. Another week passes. You’re now funding their project out of your own pocket while they sit on your money.

This happens to Australian tradies every day—plumbers, electricians, builders, landscapers, tilers. The work’s done, the invoice is clear, but the client won’t pay. You don’t need a lawyer to recover what you’re owed. You need a process.

Step 1: Send the Invoice (Day 0)

Start with a proper tax invoice the moment the job’s complete. Not a quote. Not an estimate. A compliant tax invoice.

Your invoice must include:

• Your business name and ABN
• The word “Tax Invoice” at the top
• Invoice number and date
• Description of work completed
• Amount charged (GST-inclusive if you’re registered)
• Payment terms (e.g., “Payment due within 7 days”)
• Your payment details (BSB, account number, or payment link)

Payment terms matter. If your invoice says “due on receipt,” that means immediately. If it says “net 7 days,” the client has seven days. Be specific. Vague terms like “payment expected soon” are unenforceable.

Send it via email with read receipt enabled. Keep a copy. This invoice is evidence if you end up in tribunal.

Step 2: Send a Polite Reminder (Day 7-14)

Most late payments aren’t malicious—they’re administrative. The client forgot, the email went to spam, the accounts person is on leave.

A polite reminder often works:

> “Hi [Name], just following up on invoice #[number] sent on [date]. The balance of $[amount] was due on [date]. Can you confirm when payment will be processed? Let me know if you need another copy of the invoice. Cheers, [Your Name]”

Keep it friendly. Send it via email and SMS if you have their mobile.

If they respond with “we’ll pay next week,” get it in writing. A text message saying “will pay Friday” is evidence of acknowledgment of debt.

Step 3: Send a Formal Reminder with Late Fee Notice (Day 14-21)

Still no payment? Time to escalate tone without escalating action.

Send a firmer reminder:

> “This is a formal reminder that invoice #[number] for $[amount] remains unpaid. Payment was due on [date]. Please arrange payment within 7 days to avoid further action. Late fees may apply as per our terms and conditions.”

Can you charge late fees? Only if your original terms and conditions allowed for it. You can’t invent penalty fees after the fact. But you can typically charge interest at the rate stated in your T&Cs or under your state’s penalty interest legislation (usually 8-10% per annum).

This reminder shows you’re serious. It also creates a paper trail showing you gave the client multiple opportunities to pay before taking formal action.

Step 4: Send a Letter of Demand (Day 21-30)

If three reminders haven’t worked, the client is either disputing the debt or deliberately avoiding payment. Either way, you need a letter of demand.

A letter of demand is a formal document that:

• States the amount owed
• Cites the legal basis for the claim
• Gives a final deadline (usually 7-14 days)
• Warns of tribunal or court action if payment is not received

What the letter should include:

• Your details and the debtor’s details
• Invoice number, date, and amount
• Brief description of work completed
• Payment deadline (7-14 days from the date of the letter)
• Statement of intent to commence tribunal proceedings if unpaid
• Reference to the relevant Australian consumer protection or contract law

The letter must be factual, not emotional. No threats. No insults. Just a clear statement of the debt and the consequences of non-payment.

Claim Done generates a letter of demand for $49. You tell us about your invoice, describe what happened, and the system drafts a professionally formatted letter—then delivers it to the client by email.

Step 5: Send a Final Demand (Day 35-45)

The letter of demand gave them 14 days. They ignored it. Now you send a final demand.

A final demand is shorter and blunter:

> “This is your final opportunity to pay the outstanding amount of $[amount] before tribunal proceedings are commenced. Payment must be received by [date]. If payment is not received, an application will be filed with [QCAT/VCAT/the Local Court/etc.] without further notice. You will also be liable for tribunal filing fees and interest.”

This is the last warning. After this, you file.

Claim Done’s final demand service is delivered the same way, by email.

Step 6: File a Tribunal Application (Day 45+)

If the final demand is ignored, file a small claim. Depending on the state, a money claim goes to a tribunal or to the Magistrates or Local Court:

• Queensland: QCAT (minor civil dispute, up to $25,000)
• New South Wales: Local Court (Small Claims Division up to $20,000; General Division over $20,000 up to $100,000). A claim for payment for residential building work can instead go to NCAT under its home building jurisdiction.
• Victoria: VCAT (Civil Claims List)
• South Australia: Magistrates Court (minor civil action up to $12,000; general claims up to $100,000)
• Western Australia: Magistrates Court (minor case claims up to $10,000; general procedure claims up to $75,000)
• Tasmania: Magistrates Court (Civil Division, up to $50,000)
• Australian Capital Territory: ACAT (civil disputes up to $25,000)
• Northern Territory: NTCAT (small claims up to $25,000)

Filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file. If you win, you can ask the tribunal or court to order the debtor to pay your filing fee.

What you need to file:

• Completed application form or statement of claim (available on the tribunal’s or court’s website)
• Copy of the invoice
• Copies of all reminders, letters of demand, and final demands
• Any evidence of work completed (photos, signed quotes, text messages)
• Proof of delivery for all correspondence

Claim Done’s tribunal application service prepares your application for $97—tailored to your state’s tribunal or court (for a New South Wales debt, a Local Court statement of claim), plus a witness statement.

Once filed, the tribunal or court will set a hearing date. The debtor will be served with the application.

What If They Dispute the Debt?

If the client responds to your letter of demand claiming the work was defective or incomplete, you’re in a genuine dispute. Tribunals exist to resolve these.

Do not ignore a dispute. If they raise legitimate concerns, you may need to:

• Provide evidence the work met Australian Standards
• Offer to rectify minor defects
• Negotiate a reduced settlement

If the dispute is baseless (e.g., “I just don’t want to pay”), continue the escalation. The tribunal will assess the evidence and decide.

Common Mistakes Tradies Make in Debt Recovery

Waiting too long. The longer you wait, the harder it is to recover. Start the escalation process within 30 days of the due date.

Skipping steps. Don’t jump straight to tribunal. The escalation path gives the client multiple chances to pay and shows the tribunal you acted reasonably.

Getting emotional. Angry emails and abusive texts hurt your case. Keep all correspondence professional.

Not keeping records. Every email, text, and phone call is evidence. Screenshot everything. Save everything.

Giving up. Most tradies write off unpaid invoices because the process seems too hard. It’s not. Follow the six steps.

How Claim Done Helps Tradies Recover Unpaid Debts

Claim Done is built for tradies who need to recover money without paying lawyer fees.

Letter of Demand ($49): Tell us about your invoice and describe the job. Claim Done’s Programmatic Algorithms draft a professionally formatted letter and deliver it by email.

Final Demand ($49): The last warning before tribunal. Generated and delivered the same way.

Tribunal Application ($97): Your application for your state’s tribunal or court (for a New South Wales debt, a Local Court statement of claim) and a witness statement, for you to lodge.

No subscription. Flat fees. Fast turnaround. Australia-wide.

The tribunal application is the nuclear option—but having it ready to go shows you’re serious.

Start your letter of demand at claimdone.com.au/services/letter-of-demand and get your money back.

Frequently Asked Questions

How long should I wait before sending a letter of demand?

Send a letter of demand 21-30 days after the invoice due date, after you’ve sent at least two polite reminders. This shows you gave the client reasonable opportunity to pay before escalating to formal action.

Can I charge interest on an overdue tradie invoice?

Contract interest or late fees need a term in your original terms and conditions, and you can’t add penalty fees after the invoice was issued. If your T&Cs allow it, you can charge interest at the rate specified. Without such a term, you can still ask the court for interest up to judgment, for example under s 100 of the Civil Procedure Act 2005 (NSW) for claims of $1,000 or more.

What if the client disputes the quality of my work?

If the dispute is genuine, you may need to negotiate or provide evidence the work met Australian Standards. If the dispute is baseless (e.g., they’re just avoiding payment), continue the escalation process. The tribunal will assess the evidence and decide who’s right.

How much does it cost to file a tribunal application in Australia?

Fees depend on your state and the claim amount. Filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file. If you win, you can ask the tribunal or court to order the debtor to pay your filing fee.

Do I need a lawyer to recover an unpaid tradie invoice?

No. Australia’s civil tribunals are designed for self-represented parties. You can prepare and file a tribunal application yourself, or use a service like Claim Done to generate the documents for a flat fee—no lawyer required.