New Zealand small businesses were paid 4.7 days late in the June 2026 quarter, on invoices that took 24.1 days to be paid. That is the best record among the countries Xero tracks — Australia sits at 6.0 days late, the United Kingdom at 8.3, the United States at 8.5, Canada at 11.3. It is also a country where, if your terms of trade do not say otherwise, being paid late costs the debtor nothing at all. Which puts the whole weight on something most firms improvise: the order in which they ask.
There is no general statutory entitlement to interest on a late business-to-business payment here. Unlike the United Kingdom, where the Late Payment of Commercial Debts (Interest) Act 1998 attaches interest automatically, a New Zealand supplier can charge interest only if the right was agreed in writing before the work was done. If your quote and terms of trade are silent, you have no basis to add anything — not interest, not recovery costs — and the invoice you send at day sixty is worth what it was worth on day one.
Nor is there public pressure to fall back on. The Business Payment Practices Act 2023, which would have required large entities to disclose how long they take to pay, was repealed on 8 March 2024 — before most of its provisions took effect, about eight months after royal assent, on the stated ground that the regime as amended would not have been effective. A voluntary code developed with BusinessNZ replaced it. Read plainly: the register a small supplier could have checked a client against does not exist.
The contrast with the French Pacific is worth knowing if you invoice across it. In Kanaky (New Caledonia), a country law published on 19 June 2026 moved the due date to thirty days end-of-month from invoice issue, and since 1 July the statutory floor for late-payment penalties has been 8.25 per cent a year — owed whether or not the supplier negotiated for it, with a recovery indemnity due without any formal demand. Same ocean, opposite defaults: there, the law does part of the chasing; here, none of it.
That is mostly a disadvantage, but it forces a discipline that improves collection in either jurisdiction: everything you will ever do about a late invoice has to be written down and agreed before the job. Due date, interest rate, recovery costs, and — the part almost nobody includes — the schedule of reminders itself.
A defensible rate to put there, compensatory rather than punitive, is 1.5 per cent per month on overdue amounts plus actual recovery costs. On a $4,800 invoice sixty days late that is $144, and nobody changes behaviour for $144. As with the New Caledonian regime, the clause is not a revenue line: it is what turns a reminder from your personal opinion of a client into the operation of a rule they signed.
Three things, and firmness is not among them. Surprise: the first message a client receives about an invoice is already a complaint. Inconsistency: you chase the $2,000 job at fifteen days and let the $40,000 client run to ninety, and they work it out eventually. Emotion: a message written on a tight cash week carries a charge the amount does not justify, and the charge is what gets remembered.
Every standard collection ladder shares one flaw — it begins after the due date. By then anything you write lands in a context of fault, and it is the context, not your wording, that does the damage. The fix is one sentence long: the first two contacts happen before the invoice is due, while there is nothing to accuse anyone of.
| When | Channel | What it asks for | Who sends it |
|---|---|---|---|
| At quote acceptance | Quote and terms of trade | Nothing. It states the due date, the interest rate and the reminder schedule | You, once |
| Issue | Invoice | Nothing. It carries the due date as a date, not as "30 days" | Automatic |
| 3 days before due | Nothing. It informs, and can be read without defending anything | Automatic | |
| Due + 2 | A flag, if something is blocking payment | Automatic | |
| Due + 8 | Email and statement | A payment date, not a payment | Automatic |
| Due + 15 | Letter, signed | Payment, noting the interest running | You |
| Due + 30 | Formal demand | Payment within seven days, and the next step named | You or your adviser |
| Due + 45 | Disputes Tribunal or statutory demand | A decision | Your adviser |
On the last line, the choice matters. The Disputes Tribunal hears claims up to $30,000 and is the right venue where the debt is genuinely argued about. A statutory demand under section 289 of the Companies Act 1993 is a different instrument: available against a company for a debt over $1,000, giving fifteen working days to comply and ten to apply to set it aside. It is not a faster collection letter, and using it on a disputed debt is how a creditor ends up paying the other side’s costs.
Everything up to day eight should be automatic. Those messages are triggered by a date and an account balance, require no judgement, and left to goodwill on a busy Friday they simply never go — the same failure, for the same reason, as the quote follow-up nobody sends.
From day fifteen, a person signs. Not for form’s sake, but because what follows is negotiated: an instalment arrangement, a part payment, a client going through something. Automate what does not vary; sign what gets discussed.
Which gives the one rule we will not install a system without: the sequence stops dead the moment any human reply arrives, whatever it says. In a market this size, where the same names come back on the next job, an automated reminder sent the morning after a phone call costs more than the invoice.
Only if the right was agreed in writing before the work was done. New Zealand has no general statute that entitles a supplier to interest on a late business-to-business payment — unlike the United Kingdom, where the Late Payment of Commercial Debts (Interest) Act 1998 applies automatically. If your quote and terms of trade are silent on interest and recovery costs, you cannot add either after the fact. A defensible clause sits around 1.5 per cent per month on overdue amounts plus actual recovery costs, which on a $4,800 invoice sixty days late comes to about $144.
Xero Small Business Insights put late payments at 4.7 days in the June 2026 quarter, up from 4.3 days in the March quarter but better than the 5.3-day average for 2025. Invoices took 24.1 days to be paid overall, against 24.0 days in the March quarter and a 24.9-day average in 2025. New Zealand is the best performer among the countries Xero tracks: Australia 6.0 days late, the United Kingdom 8.3, the United States 8.5, Canada 11.3. The tail matters more than the average — a handful of accounts running past sixty days is what a schedule is built for.
No. The Business Payment Practices Act 2023 would have required large entities to disclose their payment times, but it was repealed on 8 March 2024 by the Business Payment Practices Act Repeal Act, before most of its provisions came into force. The government said the regime as amended would not have been effective, and pointed instead to a voluntary code developed with BusinessNZ plus faster payment commitments from public agencies. For a small supplier, this means there is no public record to check a prospective client against before agreeing to terms.
Only when the debt is clear and simply unpaid. A statutory demand under section 289 of the Companies Act 1993 can be served on a company for a debt over $1,000 and gives fifteen working days to pay, arrange or secure it, with ten working days for the debtor to apply to set it aside. Where the amount or the work is genuinely in dispute, it is the wrong instrument and a creditor who uses it can end up paying the other side’s costs. Disputed claims up to $30,000 belong in the Disputes Tribunal.
Kanaky Tech is an AI automation agency working across New Zealand and the Pacific. Start with a free AI opportunity audit: we map how your business actually runs, rank what is worth automating, and give you a clear scope before anything is built — no obligation.