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Tradies: 6 tips for getting paid on time

How to avoid overdue invoices while maintaining working relationships

This article was written by our friends at Sprintlaw. Sprintlaw offer affordable online legal services for startups and small businesses. 


If you’re a self-employed tradie trying to make the most of your business, we know one of the hardest parts is chasing up clients for unpaid invoices. After all, you put a lot of work into your services, so you want to be fairly compensated for it.

One of the key challenges with chasing overdue payments (besides the awkwardness!) is doing it without affronting your client and damaging your working relationship. When it comes to these situations, maintaining a strong client relationship is paramount.

In most cases, you should be able to secure payment without much hassle, but there will be scenarios where your client isn’t honouring the agreement made, and you may need to prioritise your payment over the relationship with your client. If you’re a tradie with many one-off clients, this is likely to happen several times throughout your career.

But there are some things you can do to prevent these sorts of problems. First, let’s talk about how to get a client to pay an invoice once it’s become overdue.

How to get a client to pay an invoice

We’ll start with the most common situation; a client has let the due date for an invoice lapse without honouring the payment. Your first step should always be to send a friendly email to see what the situation is.

Best practice for these types of emails is to keep them short, polite and professional. Avoid angry or passive aggressive wording - you’re just checking in and providing a gentle nudge.

Here’s an example:

“Hey Sam, hope you’re well. Just a reminder that invoice INV-088 was due yesterday. You can make payment to the bank account specified on the invoice. Let me know if you have any questions.”

Hnry sends these sorts of emails automatically on behalf of our tradie customers whenever one of their client invoices is overdue.

So, what is the result?? Tradies who opt in to these automated invoice reminders receive payment 8 days faster than tradies who don’t send invoice reminders.

Follow ups are also incredibly effective at securing payment. Again, be polite but firm - and don’t badger. Wait at least 3 days between reminders.

But email reminders aren’t infallible and aren’t the only thing you can do to prevent unpaid invoices.

Let’s look at all things you can do to prevent these situations from arising.

6 ways to prevent overdue payments

The best way to make sure your invoices are paid on time is to be proactive. Rather than waiting for payments to become overdue, there are things you can do to prevent that situation from arising at all.

We’ve put together a list of 6 proactive ways that can help you avoid overdue payments and having to chase up on late invoices.

1. Have proper contracts in place with clients

You should always have contracts and agreements with clients signed before your job begins, so you are both clear on the nature of the business relationship. More specifically, having an agreement in place will reduce the chances of unsettled disputes or unpaid invoices, both of which can be stressful and take time away from your work.

Your documents should outline the details around payments, terms and conditions, and how disputes might be handled if they do arise.

If you’re looking for quality documents to use, Sprintlaw is a completely online law firm with a team of experienced lawyers who are ready to help. Specialising in making legals simple for small businesses, they offer a range of packages and services to help you hit the ground running and avoid mishaps during your business journey.

Sprintlaw offers some essential agreements that you may want to consider setting up if you’re a sole trader managing invoices from clients.

You may want to get a Service Agreement, which is essential for any client relationship. When exchanging goods and services, you want to make sure that both parties are clear on what is expected to be done or paid.

A Service Agreement might also take the form of Business Terms and Conditions. They should set out the following:

  • When and how you expect to be paid
  • Due date
  • Consequences of late payment
  • How you will accept payment
  • Whether a deposit is required
  • Currency (more relevant for businesses operating internationally)

You may also want to set up a Debt Collection Policy, which outlines the procedure to be followed when trying to get clients to pay their overdue invoices.

Having proper legals in place also reduces the need to initiate legal proceedings. Put simply, it settles any disputes around unpaid invoices before it gets to the point of legal action. This saves you money, and a lot of headaches, too!

2. Payment plan

It’s good business practice to negotiate a payment plan with your client before you deliver any services. This includes discussing their budget, any financial restraints and whether they can pay on time.

You may want to have a chat with your clients to see what kind of payment plan works out best for both you and them. This way, you can secure a good relationship with your clients while also ensuring payments are made on time, and on terms that are comfortable for both parties.

If you have flexible payment options for your client, listing these on your invoice can also help mitigate the risk that your invoice will be paid late.

3. Ask for a deposit

It’s also quite common for tradies to ask for a deposit or a down payment before the services are provided.

This might be best for long-term clients who are familiar with the quality of your work, and who you trust to pay the remainder once the job is completed.

Regardless, a deposit can help spread out your income for a job, and lower the risk of your client not paying their invoices.

4. Impose late fees

Sometimes it might make more sense to penalise clients if they don’t fulfil their commitment in the agreed timeframe. If payments are late, you can charge clients a certain fee as a ‘penalty.’

For example, it might look something like this:

  • 1 week = $25 fee
  • 2 weeks = $50 fee
  • 3 weeks = $75 fee
  • 1 month = $200 fee and Letter of Demand

Of course, these kinds of fees can be set at your discretion. However, you should add these fees to your contracts and ensure that your client is aware of how and when these penalties will incur.

It’s worth keeping in mind that while this may increase the likelihood of a timely payment, it can also lower the chance of a client honouring the payment at all should those late fees come into effect.

If you’re worried about the optics of charging ‘penalties,’ another approach is to mark up your services and then offer an early payment discount.

5. Maintain good communication

One of the most important takeaways here is that good and consistent communication is key to avoiding overdue payments.

As long as you send friendly (but consistent!) reminders to clients, you should receive your invoice payments on time far more often than not. Sometimes, clients may have just forgotten to pay and a simple nudge should do the trick.

6. Use an invoicing system (like Hnry’s)

Even if you are managing your invoices quite well, it can get overwhelming to stay on top of all the pending payments and simultaneous client relationships. One of the most convenient ways to manage your financial admin is through an online invoicing system.

A platform like Hnry can really help you streamline your invoicing process. With Hnry, you can:

  • Create professional invoices in seconds by selecting from your list of services
  • Add materials and cost of goods sold to a tax-free portion of your invoice, so you can stay on top your cash flow and not overpay the ATO
  • Easily keep track of your outstanding invoices, so you know which ones have been paid and which haven’t
  • Opt in to send automated invoice reminders, so you can get paid on time while maintaining good client relationships

If you’re interested in learning more about what Hnry can do for you, check out our resources for Tradies.

I’ve done everything above, but still haven’t been paid

Sometimes, you’ve taken every precaution but unfortunately, you still haven’t been paid.

In this case, you might be wondering whether you should take the issue to a small claims tribunal. Each state and territory has their own tribunal, so it’s important to navigate this first.

How much you are owed is probably the biggest factor in helping you decide whether or not you should take it to the small claims tribunal.

For example, if you’re owed $100 or less, it may not be worth making a claim as the filing fee alone can set you back a bit (e.g. $101 if you’re in NSW).

There are also maximum limits on how much you can claim. For example, in NSW, you’d have to go a different legal route if you need to claim more than $10,000.

You might also find yourself spending a lot of time and energy to file, prepare documents and gather evidence, with a reasonable chance that you may also have to represent yourself in court. You may consider that your time is better spent working on your next project.

Ultimately, if you do choose to make a small claim, the contracts you have in place, emails or letters you’ve sent, payment plans and invoices would all make fantastic evidence to help you prove your case.

Need some help?

Our friends at Sprintlaw would love to help you as your business grows. Learn more below:

At Sprintlaw, we’re all about preventing problems before they happen by setting up well-drafted legals to be put in place from the start. For you, that might entail having proper contracts in place that are detailed enough to hold your clients accountable - ultimately helping you save money, time and energy in the long run.

If you need help sorting out the legal side of things as a sole trader or tradie, Sprintlaw is always ready to help you out. We offer a whole range of services to help you start and grow your business. Plus, we work on a fixed-fee model, so you’ll know exactly what you’re paying for upfront and won’t be hit with any nasty surprise bills.

You can contact our team at or give us a call on 1800 730 617 for a free, no-obligations consultation. Alternatively, check out our website to learn more about what we do, and submit an online enquiry so our team can get in touch.

DISCLAIMER: The information on our website is for general educational purposes only. It doesn't cover all situations and circumstances, and shouldn't be taken as direct tax advice. If you're looking for specific help with your taxes, join Hnry and our team of experts can provide you with assistance tailored to your business needs.

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