General construction and contracting work take real-time, skill, and effort. You've probably spent multiple hours, days, weeks, and months coordinating with the site owner, working with suppliers and subcontractors, and doing the physical labor. So, it can be highly frustrating when your invoices are not paid! How can you get the money you're owed?
Step 1 — Identify Overdue Invoices
Your first step is to identify what is owed. Whether you call them past-due, overdue, or unpaid, they all mean the same thing: an invoice that hasn’t been paid by the due date you specified. You can organize the invoices based on who owes you, how much, and how overdue they happen to be. It is in your best interest to pursue the oldest bills as your options to legally enforce payment may be the closest to expiring.
Review all the past-due invoices, create a list of who needs to be notified, then move on to step 2.
Step 2 — Send a Reminder
It's a good practice to provide your clients the benefit of the doubt whenever there’s a past-due invoice. Maybe your invoice was misfiled or lost in the shuffle of the mailing company. Everyone is human and good-intentioned mistakes happen. So, send a cordial follow-up, asking the other party to pay for the overdue invoice and provide them with a second timeline to do so.
Step 3 — Send a Final Reminder Notice
In this step, you may need to include the potential actions legal actions you can take if payment is not received by a specified date. You may want to consider:
- Filing a Lien - file and serve a lien to the other party, preventing them from selling or financing their assets until you are paid.
- Small Claims Court - take the other party to court for an amount under $10,000 (varies by state) without requiring a lawyer.
- Civil Claims Court - suing the other party for a civil claim where lawyers are often present.
Step 5 — Proceed with Action
If you still haven't received payment, it's time to follow through with the actions you mentioned in your final notice to the other party. Here are some things to keep in mind:
- Check the local statutes for timelines on what can be filed and when. It's important to know what needs to be done before and throughout filing a lien in the appropriate courthouse.
- You may need to serve a "Contractor's Final Payment Affidavit" or a "Notice of Commencement" before filing your lien.
- Identify the type of liens that is most appropriate to your situation. There are a few different types that protect you depending upon the context of the dispute.
We can help you generate, file and serve a lien from your computer or phone within minutes.
Small Claims Court:
- Determine your case to see if it's appropriate for small claims court (typically $10,000 or less in the claimed amount)
- Identify the relevant parties including registered agents if you're considering suing another business
- Understand if there is an emotional component to the damages you and your business have incurred over the dispute's timeline
We can also help you generate, sign and file a small claim from your computer or phone within minutes.
Whatever you decide, it's important to remember that an unpaid invoice is not the end. You have options when it comes to reaching out and, eventually, receiving the money you are legally owed.
If you have any further questions about filing a lien or a small claims case, please reach out.