How to write a Letter of Demand in Australia (without a lawyer)

A Letter of Demand is the formal end of the reminder road: a written notice that payment is overdue, that you require it in full by a stated date, and that you are prepared to take further steps if it does not arrive. For most small business debts in Australia you do not need a lawyer to write one, and a well written demand resolves a surprising share of stubborn invoices on its own, because it changes the conversation from please to or else, politely.

When to send one

A Letter of Demand should never be the first thing a customer hears from you. Courts, tribunals and collection agencies all expect to see a history of reasonable attempts first. A common and defensible sequence is a friendly reminder about a week after the due date, a firmer notice at two weeks, a final notice at thirty days, and the Letter of Demand at about forty five days. That paper trail is worth as much as the demand itself.

What it must contain

• ✓Your business name, ABN and contact details, and the customer's correct legal name
• ✓The invoice numbers, dates and amounts, and the total outstanding
• ✓A clear deadline: payment in full by a specific date, usually seven days away
• ✓The consequences you are genuinely prepared to follow through on, such as lodging a payment default with a commercial credit reporting bureau, referring the account to a licensed collection agency, or pursuing the debt through a tribunal or court
• ✓How to pay: bank details, BPAY, or a payment link, so paying is effortless
• ✓A line inviting them to contact you immediately if the debt is disputed or already paid

The tone rules that keep you safe

The ACCC and ASIC publish joint guidelines on debt collection conduct, and the theme is simple: firm is fine, harassment is not. State facts and consequences, never threats you do not intend to act on. Do not exaggerate what will happen, do not contact debtors at unreasonable hours, and do not embarrass them in front of third parties. A demand that reads calm and procedural is also simply more effective: it signals a business with a process, and businesses with a process get paid first.

Common mistakes

• ✓Sending a demand with no reminder history behind it
• ✓Vague consequences, which read as a bluff
• ✓Threatening a specific court action you never intend to file
• ✓Getting the legal entity name wrong, which can sink later proceedings
• ✓Sending it and then doing nothing when the deadline passes, which trains the debtor that your deadlines mean nothing

Or let Mona send them

Mona Collects sends the whole sequence automatically, from friendly reminder to a formal Letter of Demand on your letterhead, worded so debtors take it seriously, and keeps the delivery records you would need if things ever go further. Set it up once and the chasing runs itself.