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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.

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

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.

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.

6. Take legal action

If nothing else has worked, you might want to take legal action. Depending on the amount of money involved, you can either get legal advice or lodge a claim with a small claims tribunal.