How to Chase Overdue Invoices in NZ (Without Losing the Client)
Chasing unpaid invoices is stressful. Here is exactly how NZ tradies and freelancers can follow up overdue invoices and get paid faster, with email and phone scripts.
You finished the job. You sent the invoice. The due date came and went, and your bank account still hasn't moved. Now you're stuck in the worst part of running a small business: chasing money you've already earned, without coming across as the bad guy.
Late payment is the number-one cash flow killer for NZ sole traders and contractors. MBIE data shows small businesses wait an average of 37 days beyond the due date to actually get paid. That's more than a month of your money sitting in someone else's account.
The good news: most overdue invoices get paid after a single, well-timed follow-up. This guide walks through exactly how to chase an overdue invoice in New Zealand, with copy-and-paste email and phone scripts, when to add late fees, and how to escalate if it comes to that, all while keeping the relationship intact.
How Long Before an Invoice Is Considered Overdue in NZ?
An invoice is overdue the day after the due date you agreed with the client. Simple as that. New Zealand has no single law that sets a standard payment term, so the term is whatever you put on the invoice (or whatever you agreed before the job).
Common NZ payment terms look like this:
- Payment on completion - due the day the work is finished, typical for small call-outs and repairs
- 7 days - a fair default for most residential trade jobs
- 14 days - common for mid-size jobs and newer commercial clients
- 20th of the month following - a traditional NZ business term you'll still see often
- 30 days - usual for larger commercial contracts and council work
If you didn't state a due date at all, the law expects payment within a "reasonable time," which is vague and hard to enforce. That alone is a reason to always put a clear due date on every professional invoice you send.
Here's the key mindset shift: an overdue invoice is not a personal slight, and most clients who pay late simply forgot. Your job is to make remembering easy, not to start a fight. The earlier and more calmly you follow up, the faster you get paid.
Step-by-Step: How to Follow Up an Unpaid Invoice (Email + Phone Scripts)
A consistent three-touch sequence recovers the vast majority of late payments. Keep each message short, factual, and friendly. Always re-attach the invoice and include your bank details so there's zero friction to paying.
Step 1 - Gentle reminder, on or 1 day after the due date. Assume the best. This is a nudge, not a chase.
Subject: Invoice #1042 from [Your Business] - due today
Body: Hi [Name], just a quick note that invoice #1042 for [job] is due today. I've attached it again here for convenience. Payment can go to [bank account number], reference #1042. Any questions, just give me a shout. Cheers, [Your Name]
Step 2 - Follow-up, 3 to 5 days after the due date. Slightly firmer, still warm.
Subject: Invoice #1042 - now a few days overdue
Body: Hi [Name], I haven't seen payment for invoice #1042 come through yet, so I wanted to check it landed okay. I've reattached it. If it's already on its way, ignore this. If there's anything holding it up, let me know and we'll sort it. Thanks, [Your Name]
Step 3 - Phone call, around 7 days overdue. A two-minute call often does what three emails can't. People find it much harder to ignore a friendly voice. Keep it light:
"Hi [Name], it's [Your Name] from [Business]. No dramas, I'm just following up on invoice #1042 from a couple of weeks back. Is everything okay your end with that one? ... Great, when do you think you'll be able to get that sorted?"
The aim of the call is a specific commitment: a date. Once they say "I'll pay it Friday," you have something concrete to hold them to, and you can send a short email confirming what you both agreed.
Step 4 - Firm final notice, 14 days overdue. Professional, clear, and with a deadline.
Subject: Final reminder - invoice #1042 outstanding
Body: Hi [Name], invoice #1042 for [amount] is now 14 days overdue. Please arrange payment by [date, 7 days out]. If there's a problem, please contact me before then so we can agree a plan. If I don't hear back, I'll have to consider further steps to recover the amount. I'd much rather sort this directly. Regards, [Your Name]
Notice that even the firm notice still offers a way out and keeps the door open. You're being clear about consequences without being aggressive, which protects the relationship if they were just genuinely stuck.
When to Charge Late Payment Fees (and How to Set Them Up)
You can charge interest or a late fee on overdue invoices in New Zealand, but only if you set it up properly in advance. A late fee you spring on a client after the fact is unlikely to hold up and will just sour the relationship.
To charge late fees legitimately:
- State it before the work starts. Put the fee in your quote, your terms, and on the invoice itself. The client needs to have agreed to it.
- Keep it reasonable. A fee should reflect a genuine cost of late payment, not act as a punishment. Common NZ practice is 1.5% per month on the overdue balance, or a modest flat admin fee (for example $15 to $25) per overdue notice.
- Show it clearly on the invoice. A short line such as: "A late fee of 1.5% per month applies to balances unpaid after the due date."
In practice, the most powerful use of a late fee isn't collecting it, it's mentioning it. A line like "just a heads up, late fees kick in after Friday" in your Step 3 or 4 follow-up often prompts payment on its own. Many tradies waive the fee the moment the client pays, using it purely as gentle leverage rather than extra income.
Escalating Overdue Invoices: From Reminder to Debt Collection
A small number of clients will ignore everything above. Here's how to escalate in order, from cheapest and friendliest to most formal.
1. Formal written demand. A clear letter or email stating the amount owed, the original due date, and a firm deadline (usually 7 to 14 days) before you take further action. Keep it factual. This is often the wake-up call that gets a stalling client moving, because it signals you're serious.
2. Disputes Tribunal. For amounts under NZ$30,000, the Disputes Tribunal is a low-cost, no-lawyers option. Filing fees are modest (currently around $45 to $180 depending on the amount), hearings are informal, and the decision is binding. It's genuinely accessible for a sole trader, you don't need a lawyer to use it.
3. Debt collection agency. For stubborn or larger debts, a NZ debt collection agency can take the chase off your plate entirely. Many work on a recovery basis, and a professional third party often gets results a small operator can't, because they do this all day. This is the point where you hand it over and get back to actual work.
4. Construction Contracts Act (for builders and subbies). If you work in building or construction, the Construction Contracts Act 2002 gives you specific tools to recover unpaid progress payments, including a payment-claim process that can be hard for a client to ignore.
Note: this is general information, not legal advice. For a specific situation, talk to a lawyer or your local Citizens Advice Bureau.
The honest truth is that escalation past a demand letter is rare when your invoicing and follow-up are tidy from the start. Which is exactly where the real win is.
How to Prevent Late Payments Before They Happen
Chasing is treating the symptom. Preventing late payment is treating the cause, and it's far less stressful. The habits that matter most:
- Agree clear terms in writing before the job. A short text or email confirming the price and the due date is enough for most jobs.
- Take a deposit on bigger jobs. 30 to 50% upfront on jobs over $3,000 is completely normal in NZ and protects your cash if the job stretches out.
- Invoice the same day the work is done. Every day you delay sending the invoice is a day added to your wait. Invoice from your phone before you leave site.
- Send a clean, GST-compliant invoice. A correct invoice avoids the client bouncing it back for a fix, which is another delay. Check the GST-compliant invoice requirements so it's right first time.
- Make paying effortless. Put your bank account number on every invoice and every reminder, not just the first one.
- Automate your reminders. The single biggest fix. Every invoice gets the same polite follow-up, automatically, so nothing slips and you never have to feel awkward.
For more on setting yourself up to get paid on time, see our guides on getting paid faster as a contractor and choosing the right payment terms.
How Invio Sends Automatic Payment Reminders So You Don't Have To
Everything in this guide works. The catch is that it relies on you remembering to do it, on a Friday afternoon, after a full day on the tools, every single time. That's where it breaks down for most people.
Invio's automatic payment reminders run the chase for you. You set your terms once, and every overdue invoice gets a polite, professionally worded reminder on schedule: a nudge on the due date, a follow-up a few days later, and a firmer note if it's still unpaid. Your bank details ride along on every message, so paying is a single tap for the client.
The result is the same outcome you'd get from disciplined manual chasing, without you having to remember, write the email, or feel like a nag. You stay focused on the work, and the system quietly gets you paid.
Stop chasing, start automating. Invio sends payment reminders for you, and it's free to start, no card required for up to 5 invoices a month. Create your free account or compare plans to unlock unlimited invoices and automatic reminders.