top of page

When Clients Don’t Pay: The Hidden Cost to Small Business


At Coast Wide Training Solutions, we pride ourselves on delivering high-quality, compliance-driven services to the VET sector. Our focus is on ethical practice, strong partnerships, and doing what’s right by our clients, students and stakeholders.


But sometimes, doing the right thing isn’t enough to protect you from businesses that don’t.


When Integrity Fails, Action Follows


It is unfortunate that I have now commenced legal proceedings against a former client to recover $36,000 in unpaid invoices. This isn't just a financial inconvenience, it’s a direct threat to my company’s cash flow, staff wages and the long-term viability of a small business.


Unfortunately, this isn’t the first time I’ve faced this situation.


In a recent case, what began as a $9,000 debt spiralled into a $28,000 recovery process stretched out over 220 days. We pursued every professional and legal avenue available: statutory demands, small claims court, payment agreements (which were broken), and finally a winding-up order. All of this, just to be paid for work we not only delivered, but were praised for.


And therein lies the most frustrating part… the pattern is predictable:

  • Stress the need for urgent help.

  • Praise the work and the thank us for saving their business.

  • Promise to pay…

  • Then vanish: ghosting, silence, unanswered emails and calls


They took the service. They refused to pay. And that is not just unethical — it’s unlawful.

Let’s call it what it is: theft.

 

Small Business Shouldn’t Carry the Burden of Others’ Bad Ethics

Small businesses, especially in the training and education sector, operate on tight margins. For most of us, a $36,000 loss isn't a line item. It’s not a cost we can carry - it’s a threat to sustainability.


I’m fortunate to have savings in place. I can pull from savings to pay my bills. If it came to it, I’d skip my own wage to ensure my company obligations are upheld. But that shouldn't have to happen. Especially not because someone else refused to meet their basic business obligations.


I Will Not Suffer Quietly

Instead of absorbing the blow, I’ve taken action. I’m backed by an exceptional legal team - two brilliant women running a small firm in Queensland who have helped me recover debts in three prior cases. Their tenacity, professionalism and ethics are a testament to the power of small businesses supporting each other.


And, of course, I have tipped them off to ASQA.

 

This post isn’t about naming and shaming. It’s about shining a light on a systemic issue.

When a business enters into a contract, accepts services, and then refuses to pay, that’s not tough luck, it’s a breach of trust and law. And it affects more than just the bottom line. It affects people, livelihoods and the sustainability of quality services in the VET sector.


What You Can Do to Protect Your Business

If you’re an RTO, service provider or small business owner, here are some practical tips we’ve implemented, and recommend to others, to minimise your risk and protect your business:


1. Use clear, enforceable service agreements - Include payment terms, default clauses, interest on late payments, and termination rights.


2. Invoice early and follow up relentlessly - Send your first invoice immediately upon delivery of service or by milestone, then implement a 3-step follow-up schedule:

  • polite reminder

  • firm notice

  • legal escalation warning.


3. Include late payment clauses (and enforce them) - For example: in your agreements or contracts, include a clause and an overdue fee. Always notify the client in writing before applying penalties.


4. Document everything - Save all emails, messages, call records, and agreed outcomes. If you end up in court or report the breach of contract to ASQA, a documented trail of professionalism strengthens your position.


5. Don’t delay legal action - After a reasonable window (e.g. 30 days + 1 formal warning), refer to a solicitor. Delays can weaken your legal and financial position, especially if the client winds up.


6. Report unethical conduct - If the client is an RTO, and especially if they’ve breached financial, governance or third-party obligations, report them to ASQA.


7. Have a risk reserve - Even a small emergency fund can protect your staff if you're impacted by a delayed or unpaid contract.

 

A Message to the Business Community

To those who pay on time, honour agreements and maintain professional respect - thank you. You are the reason businesses like Coast Wide Training Solutions can continue to serve the community with integrity and excellence.


To those who don’t, be warned… legal action will follow. I genuinely feel for the next business you attempt this with. And I hope they, too, will be prepared to stand up and fight back.

 

Let’s normalise ethical payment practices.

Let’s call out silent theft.

Let’s build a business community built on trust, respect and accountability.


 
 
 

Comments

bottom of page