How to Get Paid on Time as a US Contractor
Late payment is one of the biggest cash flow killers for self-employed US contractors. You do the work, you wait 30 days, you chase, you wait again. Meanwhile, your truck payment, insurance, and supply account don’t wait. Here’s how to fix it structurally.
Set Payment Terms Before the Job Starts
The time to establish payment expectations is in your quote – not when you’re handing over an invoice. Your quote should state:
- Deposit: 25-33% due at signing
- Progress payments: (for larger jobs) at defined milestones
- Final balance: due on completion / within [X] days of completion
- Late payment: “Accounts unpaid after 30 days are subject to 1.5% monthly interest”
When both parties sign the quote, these terms are the contract.
Invoice the Same Day as Completion
Every day between job completion and sending the invoice is cash flow delay you’ve chosen. Send it the same day, from your phone, while you’re still on site. A professional PDF invoice arriving the same evening is a very different experience for the customer than a handwritten note arriving three days later.
Follow Up Systematically
Day 1: Invoice sent – include a direct payment link (Venmo, Zelle, credit card via Square or Stripe, or check instructions)
Day 8: If unpaid – friendly text: “Hi [Name], just following up on the invoice from [date]. Please let me know if you have any questions or need another copy.”
Day 15: Second follow-up – more direct: “The invoice remains unpaid – please arrange payment by [date] to avoid a late fee.”
Day 30+: Issue a formal demand letter and consider small claims court. In most US states, contractors can sue for unpaid invoices in small claims for amounts up to $10,000-$25,000 (limits vary by state) without an attorney.
Mechanic’s Liens: Your Strongest Tool
If a homeowner or GC refuses to pay, a mechanic’s lien (also called a contractor’s lien in some states) places a legal claim against the property. This is one of the most powerful debt collection tools available to US contractors:
- It clouds the property title, making it difficult to sell or refinance
- It typically motivates payment far faster than any other approach
- It must be filed within strict deadlines (varies by state – typically 60-90 days after last work performed)
Every state has different mechanic’s lien rules. See your state contractor association or an attorney for the specific filing process.
Frequently Asked Questions
Can I charge interest on late payments from US homeowners?
Yes, if stated in your contract. The standard is 1.5%/month (18% APR). Include it in your quote terms and you’re legally entitled to it.
What’s the fastest way to get paid as a US contractor?
Digital payment methods – Zelle, Venmo (business), Square, or Stripe – are fastest. Offer multiple options and include a payment link in every invoice. Paper checks take 3-5 days and create unnecessary friction.
Kwowta helps US contractors invoice professionally and get paid faster. Try free for 6 months at kwowta.com.
