How to chase an unpaid invoice in Victoria without a lawyer

Send it the day after the due date, not three weeks later. Short, by email, with the invoice attached again. State the invoice number, the amount, the date it was due, and ask when it will be paid. Ask for a date, not for payment. A date gives you something to follow up on.

If there is no reply in seven days, call. Half the time you will find the invoice went to a personal inbox that nobody checks, or the person who approved the job has left. Write down who you spoke to and what they said, because that note becomes evidence later.

Two reminders and a phone call is enough. After that, escalate.

This is the last cheap step and it recovers more money than anything after it. A letter of demand sets out who owes what, under what agreement, and gives a firm deadline, usually fourteen days.

It should name the parties properly, including the company name and ACN if the debtor is a company. It should reference the agreement or the accepted quote. It should itemise the invoice, the amount and the due date. It should state any interest or recovery costs your terms allow. It should give a clear payment deadline and say what you will do next if the deadline passes. And it should be sent in a way you can prove, by email plus post to the registered office.

Say what you will actually do next. If you write that you will commence proceedings and then do nothing for four months, the next letter you send is worth nothing.

If the debtor is a business and the letter did not work, the Victorian Small Business Commission is the step most people do not know about. The VSBC runs low cost mediation for disputes between small businesses, and between small businesses and their landlords or their customers.

You apply online, they contact the other party, and if both sides agree you get a mediation session with an independent mediator. The fee per party is modest, far below what a lawyer's first letter costs. Check the current fee and the eligibility criteria on vsbc.vic.gov.au before you apply.

Two reasons to do it. A good share of matters settle at mediation, often with a payment plan that gets you most of the money quickly. And if the other side refuses to take part or refuses to mediate in good faith, that goes on the record and can affect costs if the matter goes further. It is a genuine step, not a formality.

The Victorian Civil and Administrative Tribunal hears civil claims about goods and services in its Civil Claims List, including unpaid invoices. It is built to be used without a lawyer. You lodge the application, pay a fee, and get a hearing date.

Smaller claims sit in a small claims stream where parties generally cannot be legally represented without permission, which keeps the cost down and stops a bigger business burying you in paper. The dollar limit on that stream changes, so check the current figure on vcat.vic.gov.au rather than relying on a number you read somewhere.

Two things to know before you lodge. VCAT is not a court, and if your matter raises federal jurisdiction, most commonly because the other party is in another state, VCAT cannot hear it and you go to the Magistrates' Court instead. And winning is not collecting. A VCAT order has to be enforced through the courts if the debtor still refuses to pay, so check whether the debtor has any money before you spend time on it. A quick ASIC company search and a look at whether they are still trading tells you a lot.

There is also a time limit. In Victoria you generally have six years from the date the debt became payable to bring a claim. Six years sounds long until you find the invoice at the back of a drawer.

Construction work in Victoria has its own faster route under the Building and Construction Industry Security of Payment Act. It covers building work and related goods and services, which includes a lot of trades that do not think of themselves as builders.

You serve a payment claim under the Act. The other side has a limited window to respond with a payment schedule setting out what they will pay and why. If they do not respond in time, the amount claimed generally becomes payable. If they do respond and you disagree, you can apply for adjudication, which is decided quickly by an adjudicator rather than over months in a tribunal.

The timeframes are short and unforgiving, and a claim served late or missing the right wording can be thrown out. If a real amount is on the line, this is a place where an hour of a construction lawyer's time pays for itself. Start at vbc.vic.gov.au for the current process.

Every step above gets easier or harder depending on what you wrote before the job started.

Payment terms give you a due date. Without one, when the debt became payable is arguable, and your reminder has nothing to point at. Interest on overdue amounts can only be charged if your terms say so and set a rate. No clause, no interest, right up until a tribunal or court awards it.

A recovery costs clause lets you claim the cost of chasing the debt, including mediation fees and in some cases collection costs. A clear scope and a written variation process stops the reply that kills most claims, which is not that they refuse to pay but that they say the work was not what they asked for. A suspension clause lets you stop work on an unpaid account without breaching the contract yourself.

And the terms have to have been accepted before the work, not attached to the invoice afterwards. A quote the customer approved by email, with the terms on it, is the piece of paper that makes everything above short.