What to Do When a Customer Won’t Pay Your Invoice as a US Contractor
Unpaid invoices are one of the most damaging cash flow problems for US contractors. Here is a systematic approach to recovering what you are owed, from polite reminder to legal action.
Step 1: Send a Clear Payment Reminder
Most overdue invoices are the result of oversight rather than deliberate non-payment. A polite but clear reminder — referencing the invoice number, amount, and due date — resolves the majority of late payments within 48 hours. Send this as soon as payment is overdue, not after several weeks. The longer you wait, the harder collection becomes.
Step 2: Phone Call
If a written reminder produces no response within five business days, call the customer directly. A calm, professional conversation — “I wanted to follow up on invoice [number], which is now [X] days overdue, is there anything preventing payment?” — resolves most situations. Do not become aggressive; keep the conversation factual.
Step 3: Formal Demand Letter
If phone contact does not resolve the situation, send a formal written demand letter stating the amount owed, the original due date, and a final payment deadline (typically 10–14 days). State that you will pursue legal remedies if payment is not received by that date. Many customers pay at this stage. The FTC guidance on contractor payment covers the legal framework.
Step 4: Small Claims Court and Mechanic’s Lien
For amounts below your state’s small claims threshold (typically $5,000–$25,000 depending on state), small claims court is accessible, inexpensive, and does not require a lawyer. For larger amounts, or as additional leverage, a mechanic’s lien on the property is available to contractors in most states — it prevents the property from being sold or refinanced until your debt is paid. Filing deadlines for mechanic’s liens vary by state and are strict; act promptly. SBA guidance on business disputes is a useful reference.
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Download CoreQuote Free on AndroidFollow the escalation path: polite reminder → phone call → formal demand letter → small claims court or mechanic’s lien. Most disputes resolve before reaching legal action.
A legal claim against a property that prevents it from being sold or refinanced until a contractor’s debt is paid. Available in most US states for unpaid construction work.
Deadlines vary significantly by state — typically 60 to 180 days from the last day of work. Check your specific state’s requirements and act promptly; missed deadlines forfeit your lien rights.
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