What to do when you haven't been paid

Getting paid for the work you've done can be challenging. Most of the time, having a polite and professional conversation with the customer can help clear up any misunderstanding.

If this doesn't help, there are other measures you can take to recover money owed to you.

Review the terms of your contract

If you have a written contract, the first thing to do is to read it carefully to check the payment conditions and debt recovery options you have under the terms of your contract.

If you have an oral agreement or part oral/part written agreement, these are just as valid as a written contract if there is proof of what was agreed.

Read our understanding contracts topic or consider getting some legal advice if you’re having problems understanding the contract terms.

Send a reminder

A missed payment could just be a general oversight. Get in touch with your customer to give them a reminder, discuss a payment date or negotiate a payment schedule. You can do this by phone, email, letter or in person.

You can find templates on Business Victoria's website to help you with written contact including:

Put it in writing

If your customer hasn’t responded to reminders, send a letter of demand, or talk to your lawyer about drafting one up for you.

Be aware that you have legal obligations when contacting other businesses regarding debt. To find out what they are, read the debt collection information on the Australian Competition and Consumer Commission website.

Tip: Getting a lawyer to draft a letter of demand may prompt a quick payment.

Get help with dispute resolution

If other methods haven’t worked you may need to get help to resolve the issue.

Read understand and manage your dispute on the Australian Small Business and Family Enterprise Ombudsman website. The website offers:

Mediation is a common form of dispute resolution where you and your customer work with a mediator to reach an agreement. You can find a nationally accredited mediator on the Mediator Standards Board website.

If you're still unable to reach an agreement, lodge a complaint through your state or territory's Fair Trading agency. They can act as an informal negotiator.

Outsource to a debt collection agency

If you can't recover the debt after friendly reminders, informal negotiations and a letter of demand, you might decide to engage a debt collection service.

Read the Debt collection guideline for collectors & creditors on the Australian Competition & Consumer Commission (ACCC) website for information about how debt collectors work.

Tip: Let your customer know that you plan to pass the matter over to a debt collector. This may prompt them to pay the debt prior to further action.

Take legal action

When all other options have been exhausted, you may consider taking legal action.

Depending on the amount of money in dispute, you can seek legal advice or lodge a claim with the Small Claims Tribunal.

Find out where to go for legal assistance on the Australian Small Business and Family Ombudsman's website or read our information about going to court over a dispute.

More useful resources   

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