![]() Here are the steps to follow if a client hasn’t paid you on time: 1. However, if your client is more stubborn, you will have to follow up with additional collection attempts. The client may have overlooked some details on their bill (like the due date) and just needed some prompting. Sometimes, the first reminder gets the job done, and an invoice gets paid straight away. Even if the customer is in the wrong, there are legal restrictions on how, when and how often you can contact someone who owes you money. In fact, you could be breaking the law by chasing up an outstanding invoice too aggressively. Whatever the reason, though, there are always benefits to handling outstanding payments professionally. Of course, it doesn’t always reflect on the service you’ve given them – a customer may have run into unexpected financial difficulties. An unhappy client may choose to withhold payment if they aren’t satisfied with the end result. Refusal to pay is a similar challenge to a customer demanding a refund, only this time, the challenge is that they haven’t paid at all. It could be that they’re unhappy with the service, it wasn’t performed in the time frame they wanted, or they may have made a mistake in their request. How to Follow Up on an Outstanding InvoiceĬlients who refuse to pay can crop up in all industries – and they can give you a hundred reasons why they can’t (or won’t) pay. These laws act as a fast track to court judgements in the building and construction industries to protect these subcontractors from non-paying clients. The Security of Payments Act (SOPA) covers those who provide construction services or supply products under a construction contract. There are extra legal protections that apply to some businesses in Australia, like those in the construction industry. A client must acknowledge and honour the payment terms stated in the agreement, but if their obligations aren’t clear, it can be much more difficult to enforce them. If a client still refuses to pay, you can go through the Alternative Disputes Resolution (ADR) or mediation process or take the case to a small claims tribunal.įor full legal protection, there should always be a clearly stated payment period in a contract or mutual agreement. However, most of these cases can be resolved before it reaches the courts. There are several payment recovery mechanisms in Australia, and you’re fully entitled to take legal action in every state of Australia. That doesn’t mean you’re out of options, though. You also can’t take anything from the client’s property without a court order, even if payment is outstanding. However, it isn’t considered theft if someone fails to pay an invoice, and it’s not a problem you can report to the police. If someone has made an agreement for products or services, it is a legal requirement that they make the proper payment, whether that’s a written or verbal contract (‘handshake deal’). Instead, payment of invoices falls under contract law in Australia, meaning any payment problems can be followed up in court. This question has a few different answers – specifically, it isn’t a criminal offence not to pay an invoice in Australia. Is It Illegal to Not Pay an Invoice in Australia? Read on to learn the best strategies for following up on an outstanding invoice. We’ve also rounded up some information from the Australian government on your legal rights if a customer decides not to pay. To help you through the process, we go into more detail about these steps below, so keep reading for the full details on how to do this. Get help from a lawyer or a debt collection service.There are countless reasons why a client might refuse to pay an invoice, but whatever the scenario is, you can still follow these key steps to recover your money: We’ve referred to guidelines from the Australian government to give you a clear step-by-step process to follow. ![]() If you are currently dealing with this problem – or want to know how to handle it in future – we have some tips on how to handle non-paying clients. Having unpaid invoices is an unexpected blip in your cash flow, and the flow-on effects can cause a lot of issues for small businesses. If you’ve already performed a service, delivered a product, or both, you’ll naturally be expecting to receive a timely payment in return. One of the most frustrating situations a business owner can face is a client who won’t pay their invoices.
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