1. Review the terms of your contract

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

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.

Consider getting some legal advice if you’re having problems understanding the contract terms.

Read our understanding contracts information.

2. Send a reminder

A missed payment could just be a general oversight. Get in touch with your customer by phone, email, letter or in person to:

  • give them a reminder
  • discuss a payment date
  • negotiate a payment schedule

Use Business Victoria’s handy debt recovery templates.

3. Put it in writing

If your customer doesn’t respond to your reminders, send a letter of demand, or ask your lawyer to draft one for you.

Be aware that you have legal and consumer law obligations when contacting other businesses about debt. To find out what they are, read the debt collection information on the Australian Competition & Consumer Commission (ACCC) website.

4. Get help with dispute resolution

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

Find out more about getting help to resolve disputes.

Check the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) website for more information on dispute support.

Mediation is a common form of dispute resolution. Look for 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.

For consumers and small businesses dispute resolution for financial complaints, go to the Australian Financial Complaints Authority (AFCA).

5. Use 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.

Tip: Let your customer know that you plan to use a debt collector. This may prompt them to pay the debt first.

Read the Debt collection guideline for collectors & creditors on the ACCC website for information on how debt collectors work.

Read next

Check our tips for preventing unpaid debt.

Find out how to manage and prevent disputes.