When Customers Don’t Pay: What Your Business Should Do Next

What would you do if a customer simply did not pay? For many startups, it is not something you plan for until it happens. Yet one unpaid invoice can quickly affect your cash flow and make it harder to pay your own expenses or keep your business moving.

When payments are delayed and nothing is done, the problem often gets worse. What starts as a late invoice can turn into a dispute or a complete loss. Without a clear approach, founders can spend too much time chasing payments or give up too early. Taking simple steps early can make a real difference and improve your chances of getting paid.

5 Practical Tips for Recovering Unpaid Invoices

1. Act early: Follow up as soon as a payment is overdue to improve your chances of recovering the debt.
2. Communicate clearly: Contact the customer to understand the issue and agree on when the payment will be made.
3. Send a formal demand: Issue a clear letter of demand that sets out what is owed and when it must be paid.
4. Escalate where needed: Use dispute resolution or court processes if the customer does not respond or refuses to pay.
5. Watch for warning signs: Look out for signs a customer may not be able to pay and act quickly to protect your position.

Free Webinar: Getting Paid – What to Do When Customers Don’t Pay

To help you get paid and protect your business, LegalVision is hosting a free webinar, Getting Paid: What to Do When Customers Don’t Pay.

Join LegalVision on Tuesday, 5 May, at 11 am NZST when Jessica Prebble (Senior Associate) will discuss:

• navigating debt prevention, early intervention, and customer relationship management whilst pursuing debts;
• formal demand processes, including statutory and letters of demand;
• alternative dispute resolution versus litigation;
• court proceedings, including the Disputes Tribunal and District Court; and
• identifying insolvency warning signs and protecting creditor positions.

Following the webinar, there will be a live Q&A. If you cannot make it, you can still register, and LegalVision will send you a copy of the recording. You are also eligible to receive a free legal consultation.

Register for free today.

About LegalVision

LegalVision is a commercial law firm that provides unlimited legal support to startups through a fixed-fee membership. We help founders manage all aspects of starting and running a business, including capital raising, corporate governance, employment incentive schemes and contracts, commercial contracts, intellectual property, and business disputes, with fast, practical advice, using custom-built tech to deliver predictable pricing and on-demand access to specialist lawyers across New Zealand, the UK and Australia. Visit legalvision.co.nz or call 0800 005 570 to get in touch with our team.

Insights from the team at LegalVision.