Here’s how to collect unpaid invoices as a contractor: work up a fixed ladder. Confirm your invoice is correct, send friendly reminders with a pay link, call, send a firm written notice, then a formal demand letter with a deadline. If that fails, use your lien rights if you’re still inside the deadline, file in small claims court, or hand it to a collection agency. Most invoices get paid by the phone call or the demand letter.
The one thing not to do is wait. Lien deadlines in Canada run as short as 45 days after the work ends, and the longer an invoice sits, the less likely it is to be paid at all. This guide covers what to send and when. It isn’t legal advice; for liens and court claims, check your province’s or state’s rules or talk to a lawyer.
First, check your own invoice
A lot of “late payers” are waiting on an answer they never asked for. Before you escalate, make sure the invoice can’t be argued with:
- Does it match the signed quote, plus any signed change orders? Extras without a signature are the most common reason people hold back payment.
- Is the deposit shown as a credit?
- Is the due date clear, and was it agreed in the quote or contract?
- Is there an easy way to pay, like a card pay link?
- Is there an open deficiency or punch-list item the customer is waiting on?
If any answer is no, fix it and resend. Our contractor invoice template covers what a clean invoice includes, and how to handle a change order covers getting extras signed before the work.
The escalation ladder
Follow the same steps for every overdue invoice. It takes the emotion out, and it builds the paper trail you’ll need if it ever goes further.
Pay link included. Assume they forgot.
Same tone, pay link again.
Ask directly if anything is holding up payment.
Reference the terms they signed and any late fee in your contract.
A deadline (usually 10 days) and what happens next.
Pick based on the amount, the customer and your deadlines.
If you might need a lien, count from the day your work ended, not the invoice date. In BC you may have only 45 days. Don’t let a polite reminder schedule run you past it.
What to say at each step
Short, specific and polite works best. Copy and adjust these.
| Step | Message |
|---|---|
| Friendly reminder | “Hi Sam, a quick reminder that invoice #1042 for $3,480 was due today. You can pay here: [link]. Thanks again for having us out.” |
| Second reminder | “Hi Sam, following up on invoice #1042 ($3,480), now 3 days past due. Here’s the link again: [link]. Let me know if you have any questions about it.” |
| Phone call | “I’m calling about the bathroom invoice. Is there anything about the work or the bill that’s holding it up? … Great, when can we expect payment?” Write down the date they give you and confirm it by text. |
| Firm notice | “Sam, invoice #1042 is now 14 days overdue. Under the terms you signed on May 2, a 2% monthly late charge applies from today. Please pay by Friday to avoid further steps.” |
If they raise a real issue on the call, fix it fast and get it in writing that it’s resolved. If they raise an issue only now, after weeks of silence, note it and keep going up the ladder.
Demand letter template
A demand letter is the last step before formal action. In California, the courts’ self-help site says asking for payment is a step you must take before filing a small claims case. Elsewhere it’s usually expected, and it often works on its own because it shows you’re serious. Send it by email and by registered mail or another method with proof of delivery.
[Date] · [Customer name and address] · Re: Unpaid invoice #1042, [job address]. On [date] you signed our quote for [work]. We completed the work on [date] and invoiced $3,480 on [date], due [date]. Despite reminders on [dates], the balance of $3,480 remains unpaid. Please pay the full amount by [date, 10 days out] using [pay link / e-Transfer details]. If we don’t receive payment by then, we intend to [register a lien / file a claim in small claims court / refer the account for collection] without further notice, and to claim interest and costs as allowed. If you believe any part of this amount is not owed, please tell us in writing before that date. [Your name, business, phone]
Only list next steps you’re prepared to take, and don’t threaten anything you aren’t entitled to do.
Offer a payment plan
Some customers can’t pay, not won’t. A written payment plan often beats a court claim: you get paid without fees, and you keep the relationship and the review.
| Worked example: $6,000 overdue | Amount | Date |
|---|---|---|
| Payment 1, on signing the plan | $2,000 | Today |
| Payment 2 | $2,000 | In 30 days |
| Payment 3 | $2,000 | In 60 days |
Put it in writing, with a line saying the full balance becomes due if a payment is missed. Set up the payments as pay links with automatic reminders so you don’t have to chase each one.
Construction liens: the deadline that matters
A lien registers your claim against the property, which makes it hard for the owner to sell or refinance until you’re paid. It’s the strongest tool most contractors have, and it expires fast. Lien rights can apply to residential renovations as well as commercial work, but the rules are detailed; check them with a lawyer or the official source before you rely on one.
| Province | Deadline to preserve or file a lien | Source |
|---|---|---|
| Ontario | 60 days after the earlier of the certificate of substantial performance being published, or the contract being completed, abandoned or terminated | Construction Act, s.31 |
| British Columbia | 45 days after the certificate of completion, or after the head contract is completed, abandoned or terminated | Builders Lien Act, s.20 |
| Alberta | 60 days from the last day materials were supplied or services completed (90 days for concrete work and oil and gas well sites) | Prompt Payment and Construction Lien Act, s.41 |
After you file, there’s a further deadline to start a court action to enforce the lien, and missing it can lose the lien. In the US, every state has its own mechanic’s lien rules, often with preliminary notices that must be sent near the start of the job, not the end. Look up your state’s rules before your next job starts.
Small claims court limits
Small claims is built for people without lawyers, and contractor invoices are a common use. You must claim within the court’s limit (or give up the excess). Limits checked on official court sites in November 2026:
| Jurisdiction | Small claims limit |
|---|---|
| Ontario | $50,000 |
| British Columbia | Civil Resolution Tribunal: most claims up to $5,000. Provincial Court: up to $35,000 |
| Alberta | Court of Justice (civil): up to $100,000 |
| Saskatchewan | Up to $50,000 |
| Nova Scotia | Up to $25,000, not including interest and costs |
| Quebec | Up to $15,000, before interest |
| California | $12,500 for individuals; $6,250 if you’re suing as a business |
| Texas (Justice Court) | Up to $20,000 |
Winning a judgment isn’t the same as getting paid. If the customer still doesn’t pay, you’ll need to enforce it, for example by garnishment, which is another process with its own fees. Use your province’s or state’s court self-help pages to file.
Collection agencies
Agencies usually work on contingency: they keep a share of what they collect and nothing if they collect nothing. Agencies we checked list commercial contingency rates from about 10% up to 50%, depending on the size and age of the debt. That makes them best for older or smaller debts where your time is worth more than the fee. Ask how they’ll contact your customer, since it reflects on your business, and whether they report to credit bureaus.
| Option | Best for | Cost | Watch for |
|---|---|---|---|
| Lien | Larger jobs, inside the deadline | Filing fees, possibly a lawyer | Short deadlines; enforcement steps |
| Small claims | Clear debts within the limit | Filing fees and your time | Collecting after you win |
| Collection agency | Older or smaller debts | A share of what’s collected | Your reputation with the customer |
| Write it off | Tiny amounts, no paper trail | The invoice | Talk to your accountant about the tax side |
Prompt payment rules
If you work for general contractors or owners on construction projects, prompt payment laws may help. Under Ontario’s Construction Act, an owner must pay a proper invoice within 28 days of receiving it unless they give a notice of non-payment within 14 days, and a contractor must pay its subcontractors within 7 days of being paid. Alberta has a similar 28-day rule. Federal construction projects follow the federal Prompt Payment for Construction Work Act, in force since December 2023. These rules mostly apply to construction contracts up the payment chain rather than everyday homeowner service calls, so check whether your job qualifies.
Make the next one easier
Every step above is easier when the job started right: payment terms in the signed quote, a deposit up front, staged payments on bigger jobs, and an invoice sent the day the job ends. Our guides on how much deposit to ask for and how to get paid faster as a contractor cover prevention in detail.
Contruva takes the chasing off your plate. Quotes are signed with a deposit in the same step, and invoices go out with a card pay link and automatic reminders, so the first three rungs of the ladder happen without you. Every message is logged against the job, which is the paper trail you want if it ever goes further. One plan, 7-day free trial, no card. See pricing.