How to Collect Unpaid Invoices as a Contractor

How to collect unpaid invoices as a contractor, in short: send a friendly reminder on the due date, a firmer one at day 7, call at day 14 and send a written demand at day 30. By day 45, choose between a mechanics lien, small claims and a collection agency, and check your lien deadline first: in some states it's 90 days from completion, not from the invoice.

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Most unpaid invoices aren't fraud. The customer forgot, is waiting on payday, or is unhappy with something and hasn't said so. A steady, written process sorts those out quickly and leaves a paper trail for the few that end up in front of a judge. This guide gives you the timeline, the exact words to use at each step, and what the law says about liens, small claims and collection agencies in a few example states. It isn't legal advice: your contract and your state's law control, and a local attorney is worth an hour for any large debt.

Key takeaways

• Start on the due date, not at day 30. The longer an invoice sits, the harder it is to collect.
• Escalate in writing: text, call, email, then a demand letter that names a date and what happens next.
• Watch the lien clock. Lien deadlines run from when the work was finished, so they can expire while you're still sending reminders.
• Small claims limits vary: $12,500 for individuals in California ($6,250 if you sue as a business), $20,000 in Texas justice court, $8,000 in Florida.
• The FDCPA covers third-party collectors, not usually a business collecting its own debt in its own name, but some state laws reach you too.
• Prevention beats collection: deposits, clear scope, and payment before the truck leaves.

What is a good timeline for collecting an unpaid invoice?

A good timeline escalates every 7 to 15 days, from a friendly reminder on the due date to a final decision by day 60. Day 0 below is the due date on the invoice. Adjust the days to your payment terms, but keep the order and keep every step in writing.

Check your lien deadline on day 0, not day 60. In California a direct contractor must record a lien within 90 days after the work of improvement is completed, or 60 days after the owner records a notice of completion, whichever comes first. If your invoice was due 30 days after you finished, that window can close around day 60 of this timeline, or day 30 if a notice of completion was recorded. See our mechanics lien basics for more states.

What should a payment reminder say?

A payment reminder should say who you are, which job, how much, when it was due and how to pay, in that order, with no blame. Copy these and change the details:

Day 0 text

Hi Dana, it's Mike from Northside Plumbing. A quick reminder that the invoice for the water heater at 14 Elm St ($2,245) is due today. You can pay here: [link]. Thanks!

Day 7 text and email

Hi Dana, invoice #1042 for $2,245 (water heater, 14 Elm St) is now 7 days past due. If something about the job isn't right, reply and we'll sort it out. Otherwise you can pay here: [link].

Day 14 call script

• “I'm calling about invoice 1042 for the water heater. Is everything working as it should?”
• If there's a complaint: book a visit to fix it and agree the payment date once it's done.
• If it's money: “Can you pay part of it today and the rest on a date we agree?” Confirm the plan by text the same day.
• If there's no answer: leave a short voicemail and send the day 14 text.

Day 30 past-due notice

Invoice #1042 for $2,245, due [date], is 30 days past due. Please pay by [date] using [link], or reply to set up a payment plan. If we don't hear from you, we'll send a formal demand.

How do you write a demand letter for an unpaid invoice?

A demand letter states the debt, the history of your requests, a final payment date and the action you'll take after it. It also proves you asked before you acted, which helps if a judge ever reads the file. Send it by certified mail and email, and keep a copy.

Final demand for payment
[Date]
To: [Customer name, job address]
Re: Invoice #1042, [work done], completed [date]

We completed the work above under our agreement dated [date]. The balance of $2,245 was due on [date]. We sent reminders on [dates] and called on [date]. To date we have not received payment or any complaint about the work.

Please pay the full balance by [date, 10 to 14 days out] at [pay link or address]. If payment isn't received by then, we intend to [record a mechanics lien on the property / file a claim in small claims court / refer the account for collection], without further notice.

[Name, business, license number, phone]

Only name an action you can actually take and still have time for. Threatening a lien after the deadline has passed, or a lawsuit you won't file, weakens every letter after it.

Should you file a lien or go to small claims court?

File a lien when the debt is large, the work improved the property and you're still within your state's deadline; use small claims when the amount fits under the court's limit or the lien window has closed. A lien clouds the title, so the owner can't easily sell or refinance until it's resolved, but in California the claim expires unless you sue to enforce it within 90 days after recording. Small claims gets you a judgment, which you then have to collect.

Limits change, so check your county court's site before you file. Bring the contract or signed quote, the invoice, photos of the finished work and every reminder you sent.

When should a contractor use a collection agency?

Use a collection agency when you've sent the demand, the amount isn't worth your time in court, and you accept giving up a share of what's recovered. Most agencies work on contingency; get the rate, whether they sue or report to credit bureaus, and how they treat your customers, in writing before you sign.

The federal Fair Debt Collection Practices Act applies to the agency. It defines a debt collector as a business whose principal purpose is collecting debts, or one that regularly collects debts owed to another, and it excludes a creditor's own officers and employees collecting in the creditor's name. Consumer debts (for personal, family or household purposes) are covered, which includes most homeowner work. Two cautions: if you collect your own debts under a different name that suggests a third party, the Act treats you as a debt collector; and some state laws, like California's Rosenthal Act, cover anyone who regularly collects debts “on behalf of that person or others”, which can include you. Keep every message truthful and civil.

How do you stop invoices going unpaid in the first place?

• Take a deposit on larger jobs when the quote is approved. See how much deposit to ask for, including state caps.
• Put payment terms on the quote, not just the invoice: when it's due, how to pay, and any late fee your state allows. Our contractor payment terms guide has wording to paste, and the contractor invoice checklist covers the rest.
• Get paid before the truck leaves on service work: send the invoice with a pay link while the tech is still on site.
• Bill progress payments on multi-day jobs so you're never owed the whole job at once.
• Write down changes: a signed change order prevents the “I never agreed to that” dispute.
• Photograph finished work before you leave. It settles most quality arguments.

Where CrewRobin fits

CrewRobin sends each invoice by text with a pay link, so the customer can pay by card through your own Stripe account, or PayPal, before your tech pulls away. Deposits can be requested when a quote is approved and come off the final invoice. Reminders and replies sit in one texting thread per customer, so the history you'd attach to a demand letter is already in one place. CrewRobin doesn't file liens, sue or collect debts for you.

Frequently asked questions

What can I do if a customer won't pay a contractor?

Send written reminders, call to find out why, then send a demand letter with a final date. If that fails, record a mechanics lien if you're still within your state's deadline, file in small claims court if the amount fits the limit, or hand the account to a collection agency.

How long should I wait before sending an unpaid invoice to collections?

A sensible point is 45 to 90 days past due, after a demand letter has gone unanswered. Check your lien deadline before you wait that long, because a lien can be stronger leverage than an agency and the window may close first.

Can I charge a late fee on an unpaid contractor invoice?

Only if it's in your agreement and allowed by your state's law, which can limit fees and interest. Put the late fee on the quote the customer signs, not only on the invoice.

Does the FDCPA apply to contractors collecting their own invoices?

Usually not: the federal definition excludes a creditor's own employees collecting in the creditor's name. It does apply if you collect under a name that suggests a third party, and state laws such as California's Rosenthal Act can cover businesses collecting their own debts.

What is the small claims limit for contractors?

It depends on the state. California allows $12,500 for individuals and $6,250 for businesses, Texas justice courts hear claims up to $20,000, and Florida small claims covers up to $8,000. Check your county court's site before filing.

Put it to work this week

Send every invoice with a pay link while the tech is still on site, and keep the reminder history on the customer record. CrewRobin is free until your first 10 booked jobs, no card up front. Start free or see pricing.

Sources

Figures from outside CrewRobin were checked against these pages in October 2026. Most industry benchmarks come from vendors and agencies, so treat them as ranges, not rules.

• California Civil Code 8412 (lien recording deadline for direct contractors)
• California Civil Code 8460 (90 days to enforce a lien)
• California Courts self-help: Small claims
• Texas Government Code 27.031 (justice court jurisdiction)
• Walton County (Florida) Clerk of Courts: Small claims
• 15 U.S.C. 1692a, FDCPA definitions (govinfo)
• CFPB: Regulation F, 12 CFR 1006.2 definitions
• California Civil Code 1788.2 (Rosenthal Act definitions)