Customer won't pay an invoice? Your options in NZ
When a customer has gone past reminders and still won't pay, you have a clear ladder in New Zealand: talk, final notice, Disputes Tribunal, then debt collection. Each step costs a little more money and goodwill, so work down it in order and stop as soon as the invoice clears.
First, find out why — it's usually fixable
Most "won't pay" is really "hasn't paid". Before you escalate, make sure you know which one you're dealing with:
- They never got the invoice — wrong inbox, spam, or a bookkeeper who never saw it. Resend it and confirm receipt.
- There's a query or dispute — about the work, the amount, or the timing. You can't collect until it's settled, so get it on the table.
- Their cash is tight — offer a short payment plan in writing rather than nothing.
- They're avoiding you — the real refusals. These are the cases the ladder below is for.
A phone call sorts most of these in one conversation. That's the step Gary automates — it rings the customer, finds out which reason you're dealing with, and tells you.
The escalation ladder
- Final notice in writing. A dated letter or email stating the amount, the deadline, and what happens next. Often this alone works — see the final notice template.
- Disputes Tribunal. Handles NZ claims up to $30,000 without lawyers, for a small filing fee. You present your own case; keep your contract, invoices, and contact notes. Fast and cheap relative to court.
- Debt collection agency. Takes a cut (often 5–20%) but needs no up-front work from you. Hand over clean records — they'll ask for every contact you've had.
- District Court. For claims over $30,000 or where you need enforcement. Slower and costlier; usually a last resort.
Keep the records that win it
Every step above rests on the same thing: proof you asked, clearly and repeatedly. Save your terms of trade, the invoice, and a note of every call and email — date, who you spoke to, and what they promised. Gary keeps a transcript and outcome for every call automatically, so the paper trail builds itself.
Protect the relationship where you can
Escalation is expensive and it usually ends the relationship. If the customer is worth keeping and the problem is cash flow, a written payment plan beats the Tribunal. Save the ladder for the customers who've stopped talking. See also charging interest on overdue invoices and, for trades, getting paid as a tradie.
This guide is general information, not legal advice.
Common questions
How much can the Disputes Tribunal handle?
Up to $30,000 in New Zealand, without lawyers, for a small filing fee. You present your own case.
Should I use a debt collection agency?
It's an option once talking has failed. Agencies take a cut but need no up-front work. Try a final notice and, for smaller sums, the Disputes Tribunal first — they're cheaper.
Can I still keep the customer after chasing them?
Often, yes — if you stay friendly through the reminders and only firm up at the final notice. A payment plan can save a good customer whose cash is temporarily tight.