Debt Recovery. What to do if a customer doesn’t pay?
by Sarah Searle | Mar 31, 2025| Latest News

With everyone feeling the economic squeeze, it is likely that you are finding you are chasing unpaid debts from customers or other businesses, limiting your business cashflow.
There are a number of steps you can take to recover the money, and processes you can put in place to reduce the chance of it happening again.
To prevent bad debts occurring and protect your business, you should consider the following:
- properly identify your customer and obtain as many contact details as you can
- check whether a company is in liquidation or deregistered on ASIC registers
- if possible, only send out goods or provide services after customers pay their bill
- provide simple, easy and clear payment options
- invoice customers quickly
- give discounts for paying on time or early
- create sensible limits on the credit that customers can take out with your business.
Not being paid for goods and services can affect the profitability and cash flow of your business. It is important to establish a process to manage payments and recover debt.
These are some steps you can take to recover outstanding debts:
- regular monitoring of when payments are due under contracts and received/not received
- contacting the customer in writing to request payment
- keeping records of all customer correspondence
- setting up regular payment reminders
- sending a formal letter of demand
- considering taking legal action
In deciding whether to pursue debts owed by customers, you’ll have to consider how much is owed, the cost and time it will take you to recover the debt, and whether the business you are chasing has the ability to pay the debt. It’s worth speaking to a solicitor.
If your customer refuses to pay or doesn’t return calls, we can to assist. We can provide a fixed fee initial consultation to discuss with you the options of pursuing the debt including Court proceedings commenced by Statement of Claim, winding up a company and bankruptcy terms.
We can also assist with advising on your terms of business and service contracts to try to avoid the issues in the first place.