Overdue Invoice Reminder Email: How to Chase an Unpaid Invoice Politely (Australia)

The best first step when a customer has not paid an invoice is a short, polite reminder that assumes they forgot. Give the invoice number, the amount, the due date and how to pay, offer to resend the invoice, and leave out deadlines, fees and threats. The Australian Government’s business site says to start with a polite reminder by phone or email, because some late payments happen simply because the customer forgot, and a calm approach can fix it without harming the relationship.

If you would rather not write it yourself, Claim Done drafts a friendly overdue invoice reminder from your answers for a flat A$29. You read it first, then we email it for you or you download it and send it yourself.

When a friendly reminder is the right step

A friendly reminder fits when the due date has passed, you have not chased the invoice yet, and nothing suggests the customer is refusing to pay. It works for business clients and for private customers. It is not the right letter for money you lent a friend or relative, because that is a loan, not an invoice.

Timing matters more than most people think. The Australian Small Business and Family Enterprise Ombudsman suggests you confirm the invoice was received and accepted, check around 10 days before the due date that it is scheduled for payment, and contact the accounts team if payment is 1 or 2 days late.

Before you write, check what you agreed. The government’s guide on what to do when you haven’t been paid says that if you have a written contract, the first thing to do is read it carefully and check the payment conditions. If the deal was spoken, you need proof of what you both agreed, such as emails or texts. Confirm the date the customer should have paid, the payment method, and what you agreed would happen if payment was late.

Check your invoice is right first

A faulty invoice can stall payment. The government’s guide to invoicing sets out the rules:

• There is no law that sets out what goes in a regular invoice, but common practice is to include the word “invoice”, your business name, your ABN, a unique invoice number, the date, your contact details, what you sold, when and how to pay, and the buyer’s name.
• A tax invoice must by law show the words “tax invoice”, your business name, your ABN, the date you issue it, a short description of what you sold, and the GST payable (if any). For sales over $1000 it must also show the buyer’s identity or ABN.
• If you are registered for GST, you must give a tax invoice when a taxable sale is more than $82.50 including GST, or when a customer asks for one. If a customer asks for one, you have 28 days to give it to them.
• The buyer needs a valid tax invoice to claim GST credits. If yours is wrong or missing details, it is not valid, and you need to replace it when the buyer asks.

What a polite payment reminder should say

Keep it short and make paying easy. A good first reminder includes:

1. The invoice number and the date it was issued.
2. What it was for, in a few words.
3. The amount and the due date, exactly as they appear on the invoice.
4. Any part payment already made, with its date, and the amount still owing.
5. How to pay: your bank details, PayID or payment link, and the reference to use.
6. An offer to send another copy of the invoice, and an invitation to raise any question about it.
7. A line saying that if they have already paid, thank you, and please let you know so you can update your records.
8. A request to arrange payment when they can, or to let you know when they expect to pay.

Western Australia’s Small Business Development Corporation says invoices should clearly state the goods or services, the amount owing, the due date and the payment methods. Your reminder should repeat them.

The structure of a friendly reminder

This is the shape the letter takes. It is not a fill-in-the-blanks template, because the wording depends on your invoice and your customer.

• Your details: your name, then your business name and ABN.
• Their details and greeting: the person by name, with their business underneath if they have one.
• Subject line: “Friendly reminder: invoice” and the number. Clear, calm, easy to find later.
• Opening line: a friendly note that the invoice was due on its due date and your records show it has not been paid yet.
• The figures: the invoice amount, any payment received, and what is still owing.
• How to pay: your payment details, or an offer to resend them.
• Help and thanks: an offer to resend the invoice, a thank-you if they have already paid, and a request to arrange payment or say when they expect to pay.
• Sign-off: one short thank-you, then your name.

How to send it and what to keep

Email is fine for a first reminder. Send it to the person who handles payment, or to the accounts team if the customer is a larger business.

Keep a copy of the reminder, the date you sent it, and any reply. The government’s invoicing guide says that by law you need to keep most business records for at least 5 years, and to keep your invoices as a record of the income you have received.

What happens next, and what to do if it is ignored

Often the reminder is enough. The customer pays, tells you it is on the way, or tells you about a problem with the invoice that you can fix. If they ask for more time, you can agree a new date or a payment schedule.

If there is no reply, a second polite follow-up by phone or email is reasonable. Keep contact to what is needed. The ACCC and ASIC debt collection guideline covers a business collecting its own debts, not only collection agencies. It is written mainly for debts owed by individuals, but says many of its principles are also relevant to business debts. It says contact must be for a reasonable purpose, and recommends no more than three contacts a week, or 10 a month at most, because unduly frequent contact may amount to undue harassment.

If reminders do not work, business.gov.au says the next step is a letter of demand. That is a more formal document, and Claim Done drafts it as a separate product. If you are in Victoria, the Victorian Small Business Commission says that if chasing an unpaid invoice has not worked, you can apply for its impartial help, which includes free early assistance and low-cost mediation. In other States, check with your State’s small business commissioner or small business agency. Chasing also costs time and money, and business.gov.au notes that in some cases the best option is to stop chasing and write off the debt.

Mistakes to avoid

• Sounding like a demand. A first reminder with deadlines, fees or warnings reads as an accusation. Save the formal tone for a letter of demand if you need one.
• Adding charges you did not agree. Check your contract for what you both agreed would happen if payment was late before you mention any extra cost.
• Getting the figures wrong. Use the exact amount, due date and any part payment. A wrong number gives the customer a reason to wait.
• Making payment hard. Put your payment details in the message. business.gov.au suggests listing payment methods and terms clearly and offering several ways to pay.
• Misleading or pressuring. The ACCC’s debt collection rules say a debt collector must not use coercion, unduly harass, or mislead or deceive the debtor. Keep every message accurate and calm.

Get your reminder written today

A clear, friendly reminder is often all it takes. Answer a few questions about the invoice, what has been paid and how the customer can pay, and Claim Done drafts a polite overdue invoice reminder for A$29 that keeps the relationship on good terms. You see it before anything is sent.