The average debtor day in Australia is around 27 days — but many businesses carry debtors well beyond 60 days on invoices that are fundamentally collectible. Most late payments are not disputes; they are oversights, competing priorities or process failures on the client side. The steps below address each stage.

1. Start with a correct, complete tax invoice

Most payment delays start with an incorrect invoice. Common causes:

Missing ABN or incorrect ABN
Invoice addressed to the wrong entity name
Wrong purchase order number (many large businesses will not process without a PO)
Not emailed to the accounts payable address (accounts@ rather than the project contact)

Use our free invoice generator to create an ATO-compliant tax invoice. Read the full tax invoice requirements guide to understand what is mandatory.

2. Agree payment terms before work starts

Payment terms agreed before the work begins are enforceable. Terms imposed after delivery are harder to enforce. Research consistently shows that shorter terms are paid faster:

7 days: Best for small, discrete jobs. Most clients pay on time because the amount is low and the work is fresh.
14 days: A good default for service businesses. Short enough to stay near the top of the accounts-payable queue.; Common but not ideal — you are essentially providing a free 30-day credit facility. Reserve for high-value, ongoing clients with a proven payment history.

State the due date explicitly on the invoice (e.g. "Due: 15 July 2026"), not just "net 30" — many accounts payable teams calculate from receipt, not invoice date.

3. Invoice on the day work is complete

Every day of delay in issuing your invoice adds to the total time before payment. Send the invoice on the day the goods are delivered or the service is complete. If you have ongoing work, invoice at a regular time each week or month — inconsistency in invoicing creates inconsistency in payment.

4. Confirm receipt

For invoices over $5,000, follow up by email or phone to confirm the invoice was received by the right person. Ask who the approver is and whether there is anything they need from you. This one step resolves most "we never received it" delays.

5. Start the reminder sequence on day one

Begin your reminder sequence on the first day an invoice is overdue, not after weeks of hoping. Most overdue invoices are paid after the first reminder. Use our payment reminder templates for ready-to-copy email text at each stage:

Day 1–3: Friendly nudge — assume oversight, keep it short
Day 7–14: Firm reminder — reference prior reminder, set a deadline
Day 21+: Final notice — clearly state escalation consequences

6. Remove friction from paying

Include your BSB and account number on every invoice
Accept EFT / bank transfer (the most common B2B payment method in Australia)
For large clients, consider offering credit card acceptance (the surcharge is often worth the faster payment)
If the client is on payment terms, send a statement at month end — it keeps the account front-of-mind

Use our free statement generator to send a professional account statement.

7. Know when to escalate

If three reminders and a final notice have not produced payment, continuing to chase in-house typically does not work — the relationship is damaged enough that external pressure is needed. The earlier you escalate, the higher the recovery rate:

Under 90 days: Best outcomes. Many clients pay on first contact from a specialist.
90–180 days: Still very recoverable. Don't wait longer.
Over 12 months: Recovery is still possible but harder. The sooner the better.

Refer a debt to Merion — commission-only, no upfront cost, no fee if unsuccessful. Use the Merion free tools to estimate recovery ROI before referring.

8. Use terms and conditions to protect yourself

Include late-payment interest clauses in your terms of trade
Reserve title of goods until payment is received (for product businesses)
Require a credit application for large or ongoing clients
Consider a personal guarantee for high-risk clients

Tools and resources

Invoice Generator — ATO-compliant tax invoices, free
Statement Generator — account statements, free
Payment Reminder Templates — ready-to-copy email and letter text
Australian Tax Invoice Requirements
Merion Free Tools — late payment cost calculator, days overdue calculator, ROI calculator
Refer a debt to Merion

How to Get Paid Faster — Practical Guide for Australian Businesses