How to Debt Collect (Without Feeling Like a Villain)

Let’s be honest; chasing unpaid invoices is nobody’s idea of a good time. You didn’t start your small business to become a part-time debt collector… yet here we are, staring at an invoice that’s older than your last decent holiday.

The good news? Debt collection doesn’t have to be awkward, aggressive, or stressful. With a tidy process (and the right tone), most late payments can be resolved quickly - while keeping the relationship intact.

Here’s a light-hearted, practical guide to getting paid on time (or at least… sooner).

1) Set yourself up to win (before the invoice is even sent)

Late payments often start with fuzzy expectations. A few small tweaks can prevent a whole lot of chasing:

• Put payment terms in writing (e.g. “7 days” or “Due on receipt”).

• Send invoices immediately and make them easy to pay (bank details, card link, BPAY - whatever suits).

• Use clear invoice notes like: “Thanks for your business - please quote invoice number when paying.”

• Consider deposit policies for larger jobs.

  
  

2) Timing is everything: a friendly follow-up schedule

Aim for consistent, calm follow-ups - not random panicked messages at midnight.

A simple timeline:

• Day 1 after due date: friendly reminder

• Day 7: firmer reminder + confirm they received it

• Day 14: final notice + payment plan option

• Day 21+: consider pausing work / escalating (depending on your relationship and the amount)

  
  

3) Keep it polite, specific, and boring (boring = professional!)

Your goal isn’t to “win” - it’s to get paid.

Use:

• The invoice number

• The amount owing

• The due date

• A clear next step (pay today, reply with ETA, call to discuss)

Avoid:

• emotional language (“I can’t believe…”, “This is unacceptable…”)

  
  

4) Pick up the phone (yep, really)

If emails are being ignored, a short call can cut through the noise.

Try: “Hi [Name], it’s Jess from The Small Business Book. Just checking you received invoice [#] for [$]. When can we expect that to be paid?”

Then stop talking. (Silence is powerful.)

5) Offer a payment plan (when it makes sense)

Some clients may be struggling, be disorganised, or waiting on their own payments. A plan can help you collect money without burning bridges.

Example:

• 50% today, 50% in 7 days

• Weekly instalments for 4 weeks

• Get it in writing by email.

  
  

6) Know when to escalate

If you’ve followed your process and they still aren’t responding:

• Pause further work/delivery (if your terms allow)

• Send a final notice

• Consider a formal letter of demand or debt collection support (here is some info and template for demand) -> demand process

If you’re unsure how far to take it, that’s where we come in.

Helpful email templates (copy/paste friendly)

Template 1: Friendly reminder (Day 1–3 overdue)

Subject: Quick reminder — Invoice [#] now due.

Hi [Name],

Hope you’re well. Just a friendly reminder that invoice [#] for [$] was due on [date]. If you’ve already paid, thank you - please ignore this message. Otherwise, would you be able to arrange payment today?

Thanks so much,

[Name]

[Business Name]

[Payment details]

Template 2: Second reminder (Day 7 overdue)

Subject: Invoice [#] overdue — please confirm payment date

Hi [Name],

Invoice [#] for [$] is now 7 days overdue. Could you please confirm you’ve received it and advise when payment will be made? If you’re experiencing delays, I’m happy to discuss a short payment plan.

Kind regards,

[Name]

[Business Name]

Template 3: Final notice (Day 14+ overdue)

Subject: Final notice — Invoice [#] overdue

Hi [Name],

This is a final notice that invoice [#] for [$] remains unpaid and is now [X] days overdue. Please arrange payment by [date] or reply today with a payment plan proposal. If we don’t hear from you, we may need to escalate the matter in line with our terms.

Regards,

[Name]

[Business Name]

Want us to jump in and handle it?

If you’re not comfortable chasing payments (or you just want your evenings back), The Small Business Book can help you tighten up your invoicing process, automate reminders, and manage debtor follow-ups professionally.

Reach out via email hello@tsbb.com.au or phone 0435 730 575 and chat with Jess - we’ll be able to take it from awkward to sorted.