There’s always that customer.
The one who’s just a few days late (every single time). The one who blames their bookkeeper. Or the one who mysteriously disappears the moment your invoice is due.

Sound familiar?

If you run a small or medium-sized business in Australia, chances are you’ve spent more time chasing payments than you care to admit. It’s frustrating, time-consuming, and bad for business—especially when you’re relying on that money to pay your own bills or grow your business.

But late payers don’t have to be part of the job. With the right systems in place—and a little backup when needed—you can protect your cash flow and finally stop playing bill collector.

Here’s how to deal with chronic late payers before they become a bigger problem.

Why late payments hit harder than you think

When a client pays late, it’s not just an inconvenience. It can cause a ripple effect across your entire business.

Let’s say you’re a graphic designer who’s just delivered a full branding package. You send the invoice – net 14 days – but weeks go by, and still no payment. Meanwhile, you’ve got your own bills stacking up, a web hosting renewal due, and your contractor waiting for their cut.

Here’s how late payments hurt:

• Cash flow crunch: Your business relies on steady income to survive. Without it, you’re left juggling expenses or dipping into savings.
• Lost time: Chasing overdue invoices means less time for new clients or bigger opportunities.
• Strained relationships: If you can’t pay your own suppliers on time, your reputation takes a hit too.
• Stress: Let’s be real, nothing kills momentum like chasing someone who owes you money.

Late payments are more than annoying. They can stall your entire business.

Spotting the repeat offenders early

Some clients genuinely forget. Others are going through cash flow issues of their own. But if someone always has a reason they can’t pay on time, it’s a red flag.

Common signs you’re dealing with a chronic late payer:

• Excuses, excuses: “I never got the invoice.” “Accounts is on leave.” “We’ll pay next week.”
• Partial payments: A sneaky $100 here and there, but the bulk still outstanding.
• Radio silence: They dodge your calls and ignore your reminders.
• Repeat behaviour: If it’s not their first overdue invoice… it probably won’t be their last.

The sooner you flag them; the sooner you can put strategies in place to protect yourself.

How to stop late payments before they start

Prevention beats collection every time. Here’s how to get ahead of the problem with systems that actually work.

1. Set crystal-clear payment terms

Don’t leave any room for confusion. Make sure every invoice or contract clearly spells out:

• Exact due dates (not just “14 days” but the actual date)
• Late fees that apply if payments aren’t made on time
• Payment options (make it easy—online is best)
• Any early payment discounts as an incentive

And always confirm the client has received and agreed to your terms before work begins.

Pro tip: Put your payment terms in bold on your invoices—right near the total. Visibility makes a difference.

2. Automate your invoicing and follow-ups

Still sending invoices manually? That’s slowing you down.

Switch to a platform that automates your process—think Xero, MYOB, or QuickBooks. You can:

• Automatically send invoices when work is done
• Schedule payment reminders before and after the due date
• Track overdue invoices without spreadsheets
• Let clients pay online with one click

Automation keeps things moving, reduces excuses, and saves you a stack of admin time.

3. Stick to a follow-up system

It’s tempting to be “too nice” when a payment is overdue—but consistency is key. Follow a three-step process like this:

• • Step 1: Friendly reminder – Sent a few days before the due date
  • Step 2: Firm follow-up – Sent the day after the invoice is overdue
  • Step 3: Final notice or letter of demand – A clear warning that the matter will be escalated

Example:
“Hi John, we’ve noticed your invoice dated March 1 is now overdue. Please arrange payment within 5 business days to avoid further action. If you’ve already paid, just let us know.”

Tone matters. Be firm but professional.

4. Offer structured payment plans—but on your terms

If a client is struggling, offering a payment plan might help recover the debt while keeping the relationship intact.

Just be sure to:

• Put the plan in writing
• Set clear instalment amounts and due dates
• Include penalties for missed payments
• Make sure they agree in writing (email confirmation works)

Generosity is great—but only when boundaries are clear.

5. Apply late fees and interest charges

A polite reminder is fine but money talks. Applying a late fee or interest charge can push even the slowest payers to prioritise your invoice.

Just make sure:

• The fees were outlined in your payment terms
• You give a clear warning before applying them
• You follow through if payment remains overdue

Clients are far less likely to ignore you when it’s costing them.

When to escalate: bringing in the professionals

Sometimes, no matter what you do, the client just won’t pay. That’s when it’s time to hand it over.

A debt collection agency like us here at JMA Credit Control can:

• Send legally compliant letters of demand
• Negotiate repayment on your behalf
• Initiate legal proceedings when required
• Work on a no recovery, no commission basis (so you don’t pay if we don’t recover)

You’ve got better things to do than chase down payments. Let us do the heavy lifting.

Final thoughts: You don’t have to tolerate late payers

Chronic late payments aren’t just annoying – they’re dangerous to your business. But with clear systems, firm boundaries, and professional backup when you need it, you can break the cycle.

If your inbox is full of “just waiting on approval” emails and overdue invoices, don’t wait until it’s too late.

Let JMA Credit Control help you get paid—faster, ethically, and with less stress.

Talk to us today and take the pressure off.