Knowing how to collect unpaid invoices is one of the most valuable skills a tradie can have. Cash flow lives or dies on getting paid, and a clear escalation process turns awkward chasing into a calm, repeatable system. This guide is a practical, step-by-step playbook for dealing with unpaid invoices in New Zealand — from a friendly reminder right through to the Disputes Tribunal.
Start before the invoice is even late
The easiest way to handle unpaid invoices nz tradies face is to prevent them. Clear payment terms, correct invoices and a deposit on big jobs all reduce the chasing later. Our guide on how to write invoices that get paid covers this in detail. But once an invoice is overdue, you need a process.
The escalation timeline
Here is a simple, proven order for chasing unpaid invoices. Move through the stages — don't jump straight to threats.
- Day 1–3 overdue — Friendly reminder (email or text).
- Day 7 — Second reminder, slightly firmer, restating the due amount.
- Day 10–14 — Phone call to the customer.
- Day 21 — Final notice / letter of demand in writing.
- Day 30+ — Debt collection for unpaid invoices, or file with the Disputes Tribunal.
The table below maps each stage to timing and a rough success likelihood, based on how most trade debts behave.
| Stage | Timing | Action | Likelihood of payment |
|---|---|---|---|
| Reminder 1 | 1–3 days overdue | Polite email or text | High |
| Reminder 2 | ~7 days | Firmer written reminder | High |
| Phone call | 10–14 days | Direct, friendly call | Very high |
| Letter of demand | ~21 days | Formal written demand | Moderate–high |
| Collection / Tribunal | 30+ days | Agency or formal claim | Moderate |
Step 1: The polite reminder
Most overdue invoices are simple oversights. A short, friendly nudge clears the majority of them. Keep it warm and assume the best. A quick message that restates the invoice number, the amount, the original due date, and the payment details does the job — and our overdue invoice reminder email templates give you ready-made wording to copy.
Step 2: Pick up the phone
If two reminders go unanswered, a call is the single most effective step in chasing unpaid invoices. A real conversation cuts through ignored emails and often surfaces the real issue — a cash-flow squeeze, a disputed line, or a lost invoice. Stay calm and solution-focused:
- Confirm they received the invoice.
- Ask directly when you can expect payment.
- Offer a short payment plan if cash is genuinely tight.
- Agree a specific date and confirm it in writing afterwards.
Many tradies hate this step, which is exactly why dealing with unpaid invoices by phone works so well — most of your competitors never make the call.
Step 3: The letter of demand
If the call doesn't land payment, send a formal letter of demand. This is a written notice stating the amount owed, the original due date, and that you intend to pursue recovery if it is not paid by a set deadline (usually 7–14 days). It signals you are serious and creates a paper trail for any later claim. Our debt recovery letter sample NZ gives you a template to adapt.
Keep it factual and firm — never threatening. Under the Fair Trading Act 1986, you must not mislead or harass, so stick to the facts of the debt.
Step 4: Debt collection for unpaid invoices
When direct contact has run its course, you can bring in help. Debt collection for unpaid invoices means either engaging an agency or escalating formally. An agency takes over the chasing, usually for a fee or a percentage of what they recover. To weigh up the options, see our guides on small business debt recovery NZ and choosing the best debt collection agency NZ.
Step 5: The Disputes Tribunal
If you still want to know how to claim unpaid invoices that no one will pay, the Disputes Tribunal is the usual final step. It hears civil claims up to $60,000, costs little to file, and does not allow lawyers — so it is well suited to trade debts. A referee hears both sides and makes a binding decision. Remember the Limitation Act 2010 gives you generally 6 years from the due date to file, so don't sit on a debt indefinitely.
For larger debts or to enforce an order, the District Court is the next step.
A done-for-you shortcut
If the reminders and phone calls are eating your evenings, that's exactly the gap TradeFlow fills. Real people make the calls and chase your overdue invoices for you — the most effective stage of the whole process — so you stay on the tools instead of on the phone.
Frequently asked questions
How do I collect unpaid invoices without damaging the relationship?
Start friendly and escalate slowly. Most overdue invoices are oversights, so a polite reminder followed by a calm phone call resolves the majority. Save formal letters and the Tribunal for genuine non-payers.
What's the most effective step when chasing unpaid invoices?
The phone call. After one or two ignored reminders, a direct, friendly conversation has the highest success rate — it surfaces the real reason for non-payment and lets you agree a firm date on the spot.
How do I claim unpaid invoices through the Disputes Tribunal?
For unpaid invoices nz businesses can't recover directly, file a claim with the Disputes Tribunal for amounts up to $60,000. It's low-cost and no lawyers are allowed. File within 6 years of the due date under the Limitation Act 2010.
When should I use debt collection for unpaid invoices?
Usually once direct reminders, a phone call and a letter of demand have all failed — typically around 30+ days overdue. An agency or a formal Tribunal claim are the main options at that point.
Sources
- Disputes Tribunal: https://www.disputestribunal.govt.nz/
- District Court – civil/debt claims: https://www.districtcourts.govt.nz/civil-cases/
- Limitation Act 2010: https://www.legislation.govt.nz/act/public/2010/0110/latest/DLM2033140.html
- Fair Trading Act 1986: https://www.legislation.govt.nz/act/public/1986/0121/latest/DLM96438.html
- Commerce Commission – consumers: https://comcom.govt.nz/consumers
- business.govt.nz – getting paid: https://www.business.govt.nz/getting-paid/
Update log
- 16 June 2026 — Published. Figures fact-checked against New Zealand government sources, including the Disputes Tribunal’s $60,000 jurisdiction limit (effective 24 January 2026, Ministry of Justice) and the six-year limitation period under the Limitation Act 2010. See Sources above.
Last reviewed: 16 June 2026.