How to handle unpaid invoices and actually get paid.

Unpaid invoices feel personal. They aren't. The client who paid the first three on time and then went silent on the fourth almost never has a problem with you, they have a problem with their own cash flow, their email, or a payment process that's harder than it should be.

This guide breaks the unpaid-invoice problem into three layers: prevention on day one, a 30-60-90 follow-up sequence with scripts you can copy, and the escalation ladder for the rare clients who actually intend to stiff you. Written for solo contractors and small crews who do their own billing, no AR clerk in a back office.

The cheapest unpaid invoice is the one that never happens. Three day-one practices kill 80% of collection problems before they start:

Card on file or deposit on acceptance

For projects over $500, collect a deposit on estimate acceptance, usually 25-40%. For service calls under $500, take a card on file via the estimate share link. The client never owes you all of it at the end; they owe you the balance. Balances get paid faster than full amounts because the client has already committed.

Net 0 ("Due on receipt") for service work, Net 15 for projects

Service calls are paid in the moment by card on a public link. Don't extend Net 30 terms to a homeowner, they're for B2B customers. Net 0 sounds aggressive on paper; it's standard for trade-service residential work and clients expect it.

Send the invoice the day the work is done

Invoices sent same-day get paid an average of 14 days faster than invoices sent the following week. The work is fresh, the satisfaction is high, the email comes when the client expects it. Same-day-invoicing alone solves a meaningful percentage of "late payment" problems that aren't actually late, they're just sent late.

An invoice past due needs structured, paced follow-up. Random nagging doesn't work and damages relationships. A pre-set sequence does work, doesn't feel personal to either party, and produces results.

All four scripts below are short. Long emails get ignored. Tone is friendly through day 15, professional through day 30, formal after that. Always reference the invoice number, the amount, and a one-click payment link.

Day 3: Soft nudge

Day 7: Friendly reminder

Day 15: Firm reminder + late-fee notice

Day 30: Final notice before escalation

Late fees are legal in every US state but capped by state usury laws. Standard practice for trade services:

• 1.5% per month (18% APR) is the most common rate. It's enforceable in nearly every state and matches typical commercial credit-card terms.
• State the late-fee terms on the estimate, not the invoice. If the client didn't see them before agreeing to the work, they may be unenforceable.
• Start the clock at the invoice due date, not the work-complete date. The client had until that date to pay without penalty.
• Waive the fee when you collect, as a goodwill gesture, on a one-time basis. "I'll waive the $21 late fee since this is the first time it's happened, please pay the original $1,450 today and we're square." Most clients pay immediately.
• Never compound late fees or stack them. Single-rate, monthly, capped at the underlying balance.

When the 30-day final notice doesn't get a response, there are three real escalation paths. Pick one based on the amount owed, the client type, and your state.

Mechanic's lien (residential trade work)

A mechanic's lien is a legal claim against the property where the work was performed. It's filed with the county recorder, attaches to the property title, and prevents the owner from selling or refinancing without settling. Available in all US states for licensed contractors who performed work that improved real property, plumbing, HVAC, electrical, roofing, remodeling, etc. Filing deadlines vary by state (60-120 days from work completion). File at day 45-60 if the invoice remains unpaid.

Small claims court (any service)

Small claims is fast, cheap, and works for almost any invoice under your state's limit (typically $5,000-$10,000). You don't need a lawyer. You bring the estimate, the invoice, the signed acceptance, photos of the completed work, and any follow-up email thread. If the client doesn't show up, you usually win by default. The judgment can then be collected through bank levy or wage garnishment. File at day 90 for amounts under the small-claims cap.

Collections agency (any service, including B2B)

Third-party collections take 25-50% of whatever they recover, which usually means you net 50-75 cents on the dollar. Worth it for stale invoices ($1,000+, 90+ days old) where you don't want to spend more time chasing. Pick a B2B collections agency that focuses on trade-service businesses, they have better recovery rates than general consumer collections.

Some clients are slow-pay every time. They eventually pay, but they take 60-90 days every invoice and require multiple follow-ups. Calculate what they're actually costing you in your time, and decide whether to keep them.

• Track follow-up time per client. If chasing payment takes more than 1 hour per invoice and you bill at $145/hour, you're losing $145 per invoice on collections alone.
• Switch repeat slow-pay clients to deposit-required-on-acceptance or card-on-file-required terms. "I appreciate your business but my terms have changed, 50% deposit on acceptance going forward." Most accept.
• Decline future work from chronic non-payers with a clean, professional message. "Thanks for the call. My current schedule doesn't have room for new clients, please reach out to {referral} who can probably fit you in." No drama, no door slammed.

A healthy small-trade business has the following AR profile, roughly:

If more than 5% of your AR is over 30 days old, the problem is upstream, either the deposit/terms structure or the same-day invoicing discipline. Fix that before chasing individual clients.