Customer Not Paying a Contractor: What to Do

When a customer isn't paying a contractor, the first step isn't a threat, it's a check: Is the money actually due under your contract, did a payment arrive that you missed, and is there a complaint behind the silence? Then comes a friendly reminder with a new date, then a firm final notice with a deadline and what happens next. If that fails too, the options are a payment plan, a mechanics lien, small claims court, a collections agency or a lawyer. Which one makes sense depends on the amount, your contract and your state. Below are both templates to copy, plus a short list of what to put in your next contract so you need them less often.

This is a general guide for US contractors, as of November 2026. Payment terms, late fees and lien rights depend on your contract and on the law of your state. This isn't legal advice. What AI employees can take over in a roofing office in general is in AI for Roofers: Estimates, Storms, Inbox.

Customer not paying a contractor: check these first

Most unpaid invoices are not fraud. They are a missed email, a payment you didn't match, or a disagreement nobody has said out loud yet. Four questions sort that out before you write anything:

If the customer is withholding part of the payment over a specific problem, a reminder for the full amount is the wrong first move. Settle the defect, then chase the undisputed rest.

Late fees and interest

Whether you can charge a late fee or interest depends on what your contract says and what your state allows. A fee that isn't in the contract is hard to add after the fact, and it makes the customer less likely to pay, not more. So the time to set it is in the estimate: due date, accepted payment methods, and any late fee in plain words. In the reminder, leave it out. In the final notice, mention it only if your contract already includes it.

Payment reminder and final notice templates

The first message is a reminder. Keep it short, attach the invoice again and give a new date. Replace everything in brackets.

Subject: Invoice [number] from [date], roof repair at [address]

Hi [name],

after we finished the job on [date], I sent you invoice [number]
for $[amount]. I haven't seen the payment come in yet, so maybe it
got buried. I've attached it again.

Could you send the payment by [new date]? You can pay by
[methods]. If you've already paid, please ignore this message.
If anything about the work or the invoice isn't right, call me
at [phone] and we'll sort it out.

Thanks,
[name]

If nothing happens, the final notice follows. It states the facts, names one deadline and says what you will do next. Only name a step you are actually willing to take.

Subject: Final notice: invoice [number], $[amount] past due

Hi [name],

invoice [number] for $[amount] for the work at [address] was due
on [due date]. I sent a reminder on [date] and haven't received
payment or a reply.

Please pay the full amount by [date, e.g. 10 days from today].
[Only if your contract includes it:] As stated in our contract,
a late fee of [amount] applies from [date].

If I don't receive payment or hear from you by then, I will
[file a mechanics lien / file in small claims court / hand this
to a collections agency].

If there is a reason you haven't paid, tell me before that date.

[name], [company]

How a business email is built in general is in Writing Business Emails: With or Without AI, more templates in Business Email Templates: 8 Examples to Copy.

If the final notice doesn't work

A mechanics lien is the tool that's specific to construction. California's Contractors State License Board puts it this way: "Contractors, subcontractors, laborers, and material suppliers can file what is called a 'mechanics lien' on a homeowner's property if they don't get paid." The catch is timing. Each state sets its own deadlines and notice requirements, and if you miss one, you can lose the lien. Look up your state's rules, at the statute or your licensing board, while the job is still running, not once the money is late.

Prevent it on the next job

• Payment terms in the estimate. Deposit, progress payments, final payment and due date, signed before you start.
• Staged payments on bigger jobs. Billing as the work progresses keeps the open amount small. How to set that up is in Progress Billing Explained, With a Template.
• Change orders in writing. Extra work without a signed change order is a frequent reason a final invoice gets disputed. How the final invoice credits them is in Contractor Invoice: Template, Final Invoice.
• A final walkthrough. Go over the job with the customer and note open items, so a complaint shows up before the invoice, not after. A template is in Construction Punch List: Template, Sign-Off.
• Easy ways to pay. The fewer steps between invoice and payment, the fewer reminders you write.

What Peter, Sonja and Frieda prepare

Peter handles payment reminders; Sonja and Frieda support him. When automating starts to pay off is in Automate Payment Reminders and Dunning. Here is how you put the three roles to work in your business.

Peter matches open invoices against payments, the way he matches receipts against the credit card statement for me. His page lists "Check invoices" and "Handle payment reminders" under "What else Peter can take on". His rule of never forcing a match applies: a partial payment or an amount held back over a defect goes on the "unclear" pile, not "open". To set it up, you describe the workflow, Peter learns it in read-only mode, you test it on real cases, then you approve it. Sonja writes emails to new clients for me; for your business she drafts the reminder and the formal notice from the approved list. Frieda hands back what needs your judgment, such as "I never got that invoice" or a complaint about the work. Legal disputes are off-limits for her, per her instructions. For a list of due dates and deadlines, you describe the workflow to her once.

None of the three sends anything on its own. Whether you chase, with what deadline, whether you charge a fee and when you file, stays your call. We'll look at how to set this up in your business together. How an AI learns your tone is in Can AI Write Emails in My Voice?; before customer data goes into a model, read AI and Privacy: What the AI Gets to See. Where open invoices fit into the monthly bookkeeping is in Bookkeeping for Contractors: What to Prepare.

Frequently asked questions

How long should I wait before sending a reminder?

Until the due date in your contract or on the invoice has passed. There's no fixed rule; what matters is that the reminder comes with a new, specific date.

What if the customer says the work isn't finished?

Then it's a dispute, not a payment problem. Go back to the job, check the punch list and agree in writing what's left. Chase the undisputed amount separately.

Can I put a lien on a house if the customer doesn't pay?

In many cases a contractor can file a mechanics lien on the property, but the deadlines and notice rules depend on your state. Check them before the job ends.

Can AI send payment reminders for me?

In my business, none of the roles that draft for clients sends on its own. A reminder to a customer who already paid can't be taken back.

If a client holds back retainage, see Construction Retention: Track It, Get It Back. For construction companies there's AI Construction Estimating: What It Can Do. For plumbing and heating, see AI for Plumbers: Quotes, Inbox and Receipts.

What to do next

Open your estimate template and check one line: does it state the due date, the payment methods and, if you want one, the late fee? Then pull your list of open invoices and sort them into paid, open and unclear before you remind anyone. If you want to know which office work in your business an AI employee can take over, book a strategy session: in 20 minutes we look at the one workflow that depends on you the most. To build roles like these yourself, join my community AI Employee Framework. More industries are on AI by industry.