How to chase late-paying clients in NZ (without damaging the relationship)

Late payment is one of the most common and most frustrating problems NZ freelancers face. Most businesses pay on 30-day terms, but the average payment time routinely stretches past 35 days. Some clients push to 60, 90, or indefinitely.

A structured follow-up process resolves most late payments without any confrontation. The key is being systematic rather than passive: most late invoices aren't malicious, they're administrative failures that respond to gentle pressure.

Before you start: check your invoice is compliant

Before chasing payment, make sure your invoice: - Has a clear due date stated - Shows your bank account number and payment reference - Is addressed to the right person (accounts payable, not just a general contact) - Meets IRD's tax invoice requirements if you're GST registered

A client who genuinely can't find your payment details has a legitimate reason for delay. Remove this excuse before you start chasing.

Stage 1: Friendly reminder (day 1 to 3 after due date)

Most late payments are administrative oversights. The invoice landed in the wrong inbox or got buried. A friendly nudge resolves the majority of cases.

What to do: Email the contact who received the original invoice, plus the accounts payable department if you have that contact. Assume good faith.

Template:

--- Subject: Quick follow-up: Invoice [INV-XXX]

Hi [Name],

Just following up on invoice [INV-XXX] for $X, which was due on [date]. Could you let me know if you've had a chance to process it?

Happy to resend the invoice or payment details if that would help.

Thanks, [Your name] ---

Stage 2: Firm follow-up (day 7 to 14)

If there's no response or payment after the first reminder, escalate. The tone becomes firm: still professional, but clearly communicating that this needs to be resolved.

Template:

--- Subject: Overdue payment: Invoice [INV-XXX]

Hi [Name],

Following up again on invoice [INV-XXX] for $X, now [X] days overdue.

Could you please arrange payment by [specific date, 7 days from now]? Bank details are on the original invoice, reference [invoice number].

If there's a dispute or issue with the invoice, let me know and we can sort it out quickly.

Regards, [Your name] ---

Stage 3: Final notice (day 21 to 28)

This is your last communication before formal action. Be direct: you'll pursue the debt if payment isn't received by a specific date.

Template:

--- Subject: Final notice: Invoice [INV-XXX], action required

Dear [Name],

Despite two previous reminders, invoice [INV-XXX] for $X remains unpaid and is now [X] days overdue.

This is a final notice. If payment is not received by [date, 7 days from now], I will be filing a claim with the Disputes Tribunal.

Please contact me immediately if you'd like to discuss a payment arrangement.

[Your name] ---

Stage 4: Formal options (day 28+)

If all communication fails, you have three practical options in NZ:

• Disputes Tribunal: for debts up to $30,000 (up to around $62,000 by mutual agreement). Filing fee is $45 to $180 depending on claim amount. No lawyers required. Hearings are informal and most commercial debt cases are resolved within 6 to 8 weeks. This is the most effective and lowest-cost option for most freelancers.
• Debt collection agency: works for debts over $2,000 when you'd rather hand it off. Agencies take a percentage (typically 20 to 35%) but handle all the chasing and report to credit agencies, which motivates many debtors to pay.
• Statutory demand: for debts over $1,000 owed by a company. A formal legal document that triggers insolvency risk for the debtor company if unpaid within 15 working days. It's a serious step; get legal advice first. Very effective for legitimate debts when the company has assets.

The Disputes Tribunal: what you need to know

The Disputes Tribunal is purpose-built for situations like this. Key facts:

- Jurisdiction: debts up to $30,000 (up to ~$62,000 by mutual consent) - Filing: online at justice.govt.nz, takes about 20 minutes - Fee: $45 (under $2,000), $90 ($2,001 to $5,000), $180 (over $5,000) - Timeline: hearing within 4 to 6 weeks typically - Evidence: bring your invoices, emails, and any contract. The referee will ask both sides for their account - Outcome: legally binding. The debtor must pay or face enforcement action

Don't be put off by the word "Tribunal." The process is designed for people without legal training and deliberately avoids formality.

How to avoid this happening again

Prevention is easier than collection:

• Require a deposit: 25 to 50% upfront for new clients or large projects eliminates most non-payment risk
• Use short terms: 14 days is standard and enforceable in NZ. 30 days is generous. 7 days is appropriate for small, clearly scoped jobs
• Include late payment terms in your contract: you can charge interest on overdue amounts if it's in your T&Cs before work begins. A common rate is 2% per month
• Watch the Cashflow tab in PayWren: it predicts payment dates based on each client's payment history. You'll see your slow payers coming
• Research new clients: the Companies Register shows if a company has had previous judgments or is in receivership. Takes 60 seconds and can save months of stress