What to Do When a Client Won't Pay an Invoice

Step 2: Send a polite payment reminder (Day 1-3)

If the invoice is 1-3 days past due, send a friendly reminder. Keep the tone light and assume good intent. Reference the invoice number, amount, and due date so they don't have to dig for details.

A simple email works: 'Hi [Name], just a friendly reminder that Invoice #1234 for $3,500 was due on [date]. I've attached a copy for your records. Let me know if you have any questions or need to set up a payment plan.'

This single email recovers the majority of overdue invoices. Most clients aren't trying to stiff you. They're busy, disorganized, or waiting on their own cash flow. A gentle nudge is often all it takes.

Step 3: Follow up with a firmer reminder (Day 7-14)

If the polite reminder didn't work, it's time to add some structure. Reference your payment terms, mention any late fee clauses, and set a clear deadline.

Your tone should still be professional but direct: 'This is a follow-up regarding Invoice #1234 for $3,500, which is now [X] days past due. Per our agreement, a late fee of 1.5% per month applies to overdue balances. Please remit payment by [new deadline] to avoid additional charges.'

At this stage, switch from email-only to phone + email. A phone call is harder to ignore than an email, and it signals that you're serious about collecting. If they don't answer, leave a voicemail and follow up with the email.

Step 4: Send a formal demand letter (Day 30+)

If two weeks of follow-ups haven't worked, it's time for a formal demand letter. This is a written notice that states the amount owed, the deadline for payment, and the consequences of non-payment (collections, small claims court, or a mechanics lien).

A demand letter serves two purposes: it often shocks a non-paying client into action, and it creates a paper trail you'll need if you end up in court. Send it via certified mail so you have proof of delivery.

You don't need a lawyer to write a demand letter, but it should reference applicable state laws. Many states have prompt payment acts that entitle you to interest and attorney's fees on overdue invoices. Tools like InvoiceFlows generate state-aware demand letters that include the right statutory references automatically.

Step 5: Consider small claims court or collections (Day 60+)

If the demand letter doesn't produce results within 14 days, you have three main options: small claims court, a collection agency, or (for contractors) a mechanics lien.

Small claims court is the most accessible option. Filing fees range from $30-$75 in most states, you don't need a lawyer, and the process typically takes 30-60 days. Most states allow claims up to $10,000-$25,000 in small claims court.

Collection agencies will pursue the debt for you in exchange for 25-50% of what they recover. This makes sense for larger amounts where you don't have time to pursue it yourself. The downside is you'll only see a fraction of what you're owed.

For contractors who improved real property, a mechanics lien is your most powerful tool. It attaches to the property itself, meaning the owner can't sell or refinance without paying you. Lien deadlines vary by state, so check your state's requirements before the window closes.

How to prevent this from happening again

The best collection strategy is one you never have to use. Start with clear payment terms in writing before the job begins. Require deposits on jobs over $1,000, especially for materials-heavy work.

Set up automatic payment reminders that go out before the due date, on the due date, and at regular intervals after. The awkwardness of manually chasing payments is what causes most contractors to let invoices slide for weeks before following up.

Consider milestone billing for large projects. A roofer billing $12,000 on completion has a much bigger collection risk than one billing $4,000 at deposit, $4,000 at dry-in, and $4,000 at completion. Smaller amounts are easier for clients to pay and easier for you to absorb if one gets delayed.