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Letter of demand template for an unpaid invoice

A letter of demand is the formal step after reminders have failed. Here is what business.gov.au says it should contain, a template to adapt, and what comes next.

No credit card required - 5 free invoices a month. General information, not legal advice. The template is free.

Before you send a letter of demand

business.gov.au says to send a letter of demand once you have tried unsuccessfully to get the invoice paid, and to make sure you have sent reminders first.

Check the invoice
It should be correct, with the amount, the due date and your payment details. Start from the tax invoice requirements if you are unsure.
Send reminders first
Use the timeline in the guide to chasing overdue invoices. business.gov.au says to make sure you have already sent reminders before you send a letter of demand.
Check the contract
Look at the payment date and what was agreed if payment was late.
Think about the risk
business.gov.au warns that a letter of demand could inflame a dispute, although it may still be needed to recover a debt.

Sources: business.gov.au: write a letter of demand, business.gov.au: what to do when you haven't been paid, checked 1 November 2026.

What to include

The facts
How much is owed, what it is for and the date by which it must be paid. Keep the information accurate and not misleading.
Interest
A late payment interest rate only if your contract specified one.
What you will do
Only the actions you are actually prepared to take.
Tone
Polite and respectful, with your signature and the date.
Copies
Attach the contract, the invoice and your earlier reminders.

Sources: business.gov.au: write a letter of demand, checked 1 November 2026.

Letter of demand template

Adapt the words in square brackets. Delete anything that does not apply, and do not state a step you would not take.

[Your name or business name]

[ABN]

[Address, phone, email]

[Date]

[Name of the person who owns the business, or the person responsible for payment]

[Business name and address]

Letter of demand: invoice [number] for $[amount]

Dear [name],

Invoice [number] dated [invoice date] for $[amount], for [description of the work or goods], was due on [due date]. It remains unpaid. I sent reminders on [dates] and [spoke with you on date].

I now ask you to pay $[amount] by [date, for example 14 days from the date of this letter]. You can pay by bank transfer to BSB [BSB], account [number], using reference [invoice number].

[Only if your contract sets one: Under clause [number] of our agreement, interest is payable on overdue amounts at [rate].]

If payment is not received by that date, I may take further steps to recover the debt, which may include [only what you are prepared to do, for example referring the matter to a debt collection service or making a claim in the relevant court or tribunal].

I would prefer to settle this directly. If there is a problem with the invoice, please contact me before the date above. Copies of the invoice, [the contract] and my earlier reminders are attached.

Yours sincerely,

[Signature] [Name]

Not legal advice
This template is general information, not legal advice, and it is not a substitute for a lawyer. For a large or disputed debt, get advice. business.gov.au notes that a letter on a lawyer's letterhead may prompt faster payment but usually costs more.

Sending it and keeping the evidence

Send it to the owner
business.gov.au suggests addressing it to the person who owns the business, not only your usual contact.
Registered post
business.gov.au recommends registered post with a signed proof of delivery card. Keep the card, the signed letter and copies of the original documents as evidence.
Keep a record
Note conversations and keep emails and letters, in case the matter goes further.

Sources: business.gov.au: write a letter of demand, business.gov.au: when to go to court over a dispute, checked 1 November 2026.

If it is still unpaid

business.gov.au lists the next steps in this order. Which one suits depends on the amount and on whether the customer disputes the invoice.

Dispute help
Low-cost dispute resolution or mediation, for example through the Australian Small Business and Family Enterprise Ombudsman.
Debt collection
A debt collection service charges a fee, usually called a commission, and typically sends its own letter of demand.
Small claims
Some states and territories have a tribunal for small claims and others a small claims division of the magistrates' court. Make the claim in the lowest-level court that can decide it. Time limits and costs vary, so check your own state or territory.

Sources: business.gov.au: debt collection services, business.gov.au: when to go to court over a dispute, business.gov.au: what to do when you haven't been paid, checked 1 November 2026.

Better still, avoid the letter. Invio's Auto-Reminders chase an unpaid invoice on a set schedule and stop as soon as you mark it paid. They are free on your first 3 invoices and run on every invoice on a paid plan.

Questions about a letter of demand

What is a letter of demand?
According to business.gov.au, a letter of demand states how much a business owes you, what for and when they need to pay the invoice by. It may warn that you will consider legal action if the debt is not paid by that date.
Do I need a lawyer to send one?
No. You can write one yourself. A lawyer can write it on law firm letterhead, which may prompt faster payment but usually costs more. For a large or disputed debt, get legal advice.
Can I add interest or fees to a letter of demand?
business.gov.au says to include a late payment interest rate only if your contract specified one. Do not add charges that were not agreed before the work.
How long do I give them to pay?
Name a clear date that gives the customer a reasonable time to pay. Check your contract, and your state or territory, for any notice you are required to give.

Get paid before it gets this far. Reminders that run themselves.

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