How is a final notice different from a letter of demand?

A letter of demand is the first formal notice. A final notice is a second, more urgent notice sent after the letter of demand has been ignored. It sets a shorter deadline and makes explicit that legal action or referral to a recovery agency is imminent.

Is a final notice required before commencing legal proceedings?

No — Australian courts do not generally require a pre-litigation demand. However, many courts will consider whether the parties attempted to resolve the dispute before filing, and a history of formal notices strengthens your position.

How long should I give in a final notice?

Seven days is standard. Courts have found 7 days to be reasonable for most commercial debts. If the debtor has previously indicated they cannot pay immediately, you may extend this, but note it on the letter.

Can I send a final notice by email?

Yes — most B2B credit agreements include email as an accepted method of service. Send to the debtor's last known email address and keep the delivery receipt. If you have a postal address, send by post as well.

Final Notice Before Legal Action Template — Free Download

Use this template after your letter of demand has been ignored. A final notice signals the end of your internal recovery process. If this notice is also ignored, refer the account to Merion or commence legal proceedings without further delay.

Final Notice Before Legal Action — Template

[YOUR BUSINESS NAME]
ABN: [Your ABN]
[Your Street Address, Suburb, State, Postcode]
Phone: [Your Phone] | Email: [Your Email]

[Date]

[Debtor Full Name / Business Name]
[Debtor Street Address]
[Suburb, State, Postcode]

BY EMAIL: [[email protected]] / BY POST

RE: FINAL NOTICE BEFORE LEGAL ACTION — Account [Reference Number]

Dear [Debtor Name / Sir or Madam],

We refer to our previous correspondence regarding the above account, including our letter of demand dated [Date of LOD]. Despite our repeated attempts to resolve this matter, the debt set out below remains outstanding and unpaid.

OUTSTANDING INVOICES

Invoice #	Invoice Date	Amount (AUD incl. GST)	Interest Accrued	Total
[INV-001]	[DD/MM/YYYY]	$[x,xxx.xx]	$[xxx.xx]	$[x,xxx.xx]
[INV-002]	[DD/MM/YYYY]	$[x,xxx.xx]	$[xxx.xx]	$[x,xxx.xx]
TOTAL NOW OWING				$[x,xxx.xx]

The total amount now owing is $[Total Amount][, which includes interest accrued at [X]% per annum in accordance with our credit terms from [date debt fell due] to [today's date]].

DEMAND FOR PAYMENT
You are required to pay the full outstanding amount of $[Total Amount] on or before [DATE — 7 days from the date of this letter]. Payment must be made by EFT to:
Bank: [Bank Name] | BSB: [BSB] | Account: [Account Number]
Account Name: [Your Business Name] | Reference: [Account/Invoice Reference]

CONSEQUENCES OF NON-PAYMENT
If payment in full is not received by the date specified above, we will, without further notice or demand:

(a) refer this account to a debt recovery agency (Merion Commercial Recoveries); and/or
(b) commence legal proceedings against you in the [Magistrates / District / Supreme] Court of [State/Territory].

You will be liable for all costs of recovery, including debt recovery agency fees, court filing fees, and legal costs, in addition to the outstanding debt and any interest owing.

Without Prejudice
This letter is sent without prejudice to any other rights or remedies the Creditor may have. Nothing in this letter constitutes a waiver of any rights.

Yours faithfully,

_________________________________
[Full Name]
[Position]
[Your Business Name]
Date: [Date]

When to use vs a letter of demand

The recommended escalation timeline for a commercial debt is:

Overdue account statement — send immediately when payment terms are exceeded
Letter of demand — send 14 days after the overdue statement if unpaid
Final notice (this template) — send 14 days after the letter of demand if still unpaid
Refer to Merion or commence proceedings — if no response within 7 days of this notice

By the time you send a final notice, you will have a clear paper trail demonstrating that you gave the debtor multiple opportunities to pay. This strengthens your position in any subsequent proceedings and in any court cost assessment.

This template is provided for general guidance only and does not constitute legal advice. The content of the interest claim and the consequences stated must be accurate and supportable. If you intend to commence legal proceedings, obtain legal advice before filing.

Final Notice Before Legal Action Template

When to use vs a letter of demand

Refer to Merion — no recovery, no fee.

Related tools

Letter of Demand Template

Commercial Credit Application Template

Payment Plan Template

Overdue Account Statement Template