How to Stop Chasing Payments and Get Paid on Time

You finished the job three weeks ago. The client said the check was 'in the mail.' You've texted twice, called once, and you're starting to feel like a bill collector instead of a contractor. This is one of the most frustrating parts of the business — but it's almost entirely preventable.

Getting paid on time is not about being pushy. It's about setting expectations before the job starts, making payment easy, and having a clear follow-up system. This guide covers deposits, payment schedules, invoice timing, lien rights, and the exact scripts to use when payment is late.

Get a Deposit Before You Start

This is non-negotiable. A deposit does two things: it covers your upfront material costs, and it proves the client is serious. If someone won't put money down, that's a red flag about their willingness to pay the final bill.

• Jobs under $5,000: 50% deposit is standard.
• Jobs $5,000-$15,000: 33-40% deposit is common.
• Jobs over $15,000: 20-30% deposit, with progress payments tied to milestones.
• Always collect the deposit before ordering materials or scheduling the work.
• Never finance a client's project with your own money.

For a deeper breakdown of how much to ask for by job size and trade, read our guide to contractor deposits.

Use a Written Agreement on Every Job

It doesn't have to be a 10-page contract written by a lawyer. A simple written agreement that both sides sign — even electronically — covers you. Here's a proposal template that works. At minimum, it should include:

1. Scope of work — what you're doing and what you're not.
2. Total price and what's included.
3. Payment schedule — deposit, milestones, final payment.
4. Payment due date — 'due upon completion' or 'net 7 days.'
5. Late payment terms — late fees, work stoppage, interest.
6. Change order process for additional work.

Structure Your Payment Schedule

For anything beyond a half-day job, break payments into milestones. This keeps cash flowing and limits your exposure if a client stops paying.

Small Jobs (Under $2,000)

• 50% deposit to start
• 50% on completion

Medium Jobs ($2,000 — $10,000)

• 33% deposit to start
• 33% at midpoint milestone
• 34% on completion

Large Jobs (Over $10,000)

• 25% deposit
• 25% at each of two milestones
• 25% on completion
• Retain 10% for punch list if needed

Send the Invoice Immediately

Don't wait. The moment the job is done — or the milestone is hit — send the invoice that same day. The longer you wait, the less urgency the client feels. Same-day invoicing also signals professionalism and sets the expectation that you take payment seriously.

• Send the invoice within 24 hours of milestone completion.
• Include the total, the due date, and payment instructions.
• List any previous payments and the remaining balance.
• Attach photos of completed work if it helps justify the milestone.

Know Your Lien Rights

Every state has mechanics' lien laws that protect contractors who don't get paid. You don't have to file one often, but knowing you can is powerful. And in most states, you need to follow specific steps to preserve your right to file one.

• Send a preliminary notice at the start of every job (required in many states).
• Keep records of all work performed and materials delivered.
• Know your state's lien filing deadline — usually 60-90 days after completion.
• Mention lien rights in your contract — it's not a threat, it's standard business practice.

When Payment Is Late: The Follow-Up Script

Have a system instead of winging it. Following a consistent process takes the emotion out of it and gets you paid faster.

Day 1 Past Due: Friendly Reminder

Day 7 Past Due: Direct Phone Call

Day 14 Past Due: Written Notice With Late Fee

Day 30+ Past Due: Final Demand Letter

Prevention Is Easier Than Collection

The contractors who rarely chase payments all do the same things: they collect deposits, use written agreements, bill at milestones, invoice immediately, and make it easy to pay. None of this is complicated — it just takes discipline. Set up the system once and follow it every time.

If cash flow is tight even when clients do pay on time, the problem may be your pricing, not your collections. Make sure your bids actually cover labor, overhead, and profit using a real pricing formula.