Chasing Late Payments

The cost of not chasing

Many business owners feel uncomfortable chasing overdue invoices. They worry about damaging the relationship, looking desperate, or seeming aggressive. As a result, they wait — and waiting is the most expensive thing you can do.

The statistical reality is stark: the probability of full recovery drops significantly with every week an invoice goes unaddressed. At 30 days overdue, recovery is near-certain if you act. At 90 days, the rate drops meaningfully. At 180 days, many debts become economically unrecoverable without professional intervention.

A systematic, professional follow-up cadence — one that escalates incrementally without becoming aggressive — is the single most effective tool a business owner has for reducing bad debt.

The escalating cadence: stage by stage

The cadence below assumes a Net 14 invoice. Adjust the timing for your own payment terms.

Day 14 (due date) — friendly reminder

If payment has not arrived on the due date, send a brief, friendly email. Keep the tone light — assume it's an oversight. Include: the invoice number, amount, due date, and your bank details. A subject line like "Invoice #1042 — just a quick reminder" is appropriate.

You can automate this step using invoice reminder templates — the Merion invoice tools include pre-written reminder sequences you can send with one click.

Day 21 (7 days overdue) — follow-up email

If payment has not been received, send a second email. Slightly firmer in tone: "Following up on our email from last week — invoice #1042 for $[amount] was due on [date] and remains outstanding. Please arrange payment or contact us if you have any queries about the account." Attach a copy of the invoice.

Day 28 (14 days overdue) — phone call

At this point, stop relying on email. Call the accounts payable contact directly. This is the step most business owners skip — and it is the most effective one. State your purpose clearly: "I'm calling about invoice #1042 for $[amount], which was due on [date]. Can you confirm when payment will be made?" Listen to the answer. If they commit to a date, confirm it in an email immediately after the call.

If they say it's been approved and is in the next payment run, ask specifically: "When does that run? So I should expect the funds by [date]?" Get a specific date, not a vague assurance.

Day 35 (21 days overdue) — escalation email

If the committed payment date has passed without payment, send an escalation email. Reference the phone call and the commitment: "On [date], [name] confirmed payment would be made by [date]. We have not received it. Please arrange immediate payment or contact us to discuss. If this invoice remains unpaid by [date + 7 days], we will take further steps to recover the amount outstanding."

This email should come from a senior person in your business — if you are the owner, from you personally.

Day 42 (28 days overdue) — letter of demand

At this point, the matter moves to a formal letter of demand (covered in detail in Lesson 5). The letter is a last step before professional or legal escalation. It should be in writing (email and hard copy), from a named senior person, state the exact amount outstanding, provide a clear deadline, and specify what action you will take if payment is not received.

Logging your contacts

Every contact attempt — email, phone call, voicemail — should be logged. Record:

• Date and time
• Method (email / phone / letter)
• Who you spoke to (or whether you left a voicemail)
• What was said (a brief summary)
• Any commitment made (amount and date)
• Outcome (payment received / no response / disputed)

This log is essential if the matter escalates. A collection agency or solicitor will ask for it. A court may also consider it. Businesses that document their collection efforts are in a significantly stronger position in any dispute.

The psychology of the follow-up

Most debtors — even those experiencing genuine financial difficulty — respond to clear, consistent, professional pressure. They are not deliberately ignoring you most of the time; they are managing their cash by paying whoever is pressing most consistently. Be that creditor.

Aggressive or threatening language is counterproductive. It provokes defensive responses, can expose you to complaints under the ACCC/ASIC debt collection guidelines (see Lesson 8), and damages the relationship even if you eventually recover the money. "Polite but firm and consistent" recovers more debt than "angry and erratic."

The other key insight: if a debtor makes a commitment and breaks it, do not accept another promise without escalating. A broken commitment is a signal that verbal assurances are not reliable for this account. Move immediately to written demand and, if that doesn't work, professional escalation.

When the cadence breaks down

Not every customer responds to a polite follow-up cadence. Some will go silent. Some will dispute. Some will be genuinely insolvent. When the cadence has run its course — typically by the 30–45 day overdue mark — it is time to consider a letter of demand (Lesson 5) or professional escalation (Lesson 6).

Related tools and resources

• Invoice reminder template sequences — automated follow-up from day 1 to formal demand
• Days overdue calculator — track exactly how old each invoice is
• Credit Control Playbook — the full Merion cadence with templates