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

Late payment is one of the most common problems facing NZ freelancers and contractors. According to Statistics NZ data, small businesses wait an average of 37 days for payment — well beyond the 30-day terms most set. Some clients take 60, 90, or never.

The good news: a structured follow-up process resolves most late payments without confrontation. Here's exactly what to do at each stage.

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 first.

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

Most late payments are administrative oversights — the right person didn't get the invoice, or it got lost in an inbox. A friendly reminder 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. Keep the tone light — 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?

If you need me to resend the invoice or the payment details are anywhere, just say the word.

Thanks, [Your name] ---

Stage 2: Firm follow-up (day 7–14)

If no response or payment after the first reminder, escalate. The tone becomes professional and firm — still polite, but clearly communicating urgency.

Template:

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

Hi [Name],

I'm following up again regarding 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, please let me know and we can resolve it quickly.

Regards, [Your name] ---

Stage 3: Final notice (day 21–28)

This is your last communication before formal action. State clearly that you'll be pursuing the debt if payment isn't received.

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], I will be filing a claim with the Disputes Tribunal / engaging a debt collection agency.

Please contact me immediately if you wish 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. Filing fee is $45–$180 depending on claim amount. No lawyers required. Hearings are informal. Most commercial debt cases are resolved within 6–8 weeks. This is the most effective and lowest-cost option for most freelancers.
• Debt collection agency — works for debts over ~$2,000 where you want someone else to handle it. They take a percentage (typically 20–35%) but do the chasing for you. The debt is reported 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. Serious step — consult a lawyer 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 exactly like this. Key facts:

- Jurisdiction: debts up to $30,000 (up to $62,000 by agreement) - Filing: online at justice.govt.nz — takes about 20 minutes - Fee: $45 (under $2,000), $90 ($2,001–$5,000), $180 (over $5,000) - Timeline: hearing within 4–6 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 intimidated by the process. The Tribunal is informal and designed for people without legal training.

How to avoid this happening again

Prevention is easier than cure:

• Require a deposit — 25–50% upfront for new clients or large projects eliminates most non-payment risk
• Net-14 terms — 14 days is standard and legally enforceable in NZ. 30 days is generous. 7 days is aggressive but acceptable for small 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 history. Red-flagged clients are your slow payers
• Check the client first — the Companies Register shows if a company has had previous judgments or is in receivership