How to Make Sure You Get Paid — Every Time
Getting paid is the whole point of running a contractor business — and yet payment disputes and non-payment are among the most common problems small contractors face. Most of them are preventable with the right practices from the start.
Always Get a Deposit Before Starting Work
Never start a job without a deposit. A 25–50% deposit upfront is standard practice and serves two purposes: it confirms the client is serious and financially capable, and it covers your material costs so you are never out of pocket. Clients who refuse to pay a deposit are a red flag — serious homeowners understand and expect this practice.
Always Use a Signed Written Proposal
A verbal agreement is worth nothing in a dispute. Every job — no matter how small — should have a signed written proposal before work begins. The signed proposal is your evidence of what was agreed, what the price was, and what the payment terms are. Without it, you have no legal standing if a client refuses to pay.
Use Change Orders for Every Scope Change
Scope creep is one of the top causes of payment disputes. When a client asks for additional work beyond the original proposal, stop and write a change order — a brief document describing the additional work, the additional cost, and requiring the client’s signature before proceeding. Never do additional work on a verbal “yeah sure go ahead” — put it in writing every time.
Invoice Promptly and Follow Up Systematically
Send your final invoice the day the job is complete — not a week later. Prompt invoicing signals professionalism and catches the client while the work is fresh in their mind and satisfaction is highest. If payment is not received by the due date, follow up with a phone call on day one, a written reminder on day 7, and a formal demand letter on day 14.
Know Your Lien Rights
Every state gives contractors the legal right to place a mechanic’s lien on a property for unpaid work. A lien prevents the property from being sold or refinanced until the debt is paid. Lien rights have strict notice and filing deadlines — often 30 to 90 days from the last day of work. Know your state’s lien laws before you need them. Filing a lien or threatening to file one is often enough to prompt payment from clients who have the money but are stalling.
Small Claims Court as a Last Resort
For unpaid balances within your state’s small claims limit (typically $5,000–$15,000), small claims court is an accessible and affordable option. You do not need a lawyer. Bring your signed proposal, change orders, invoices, photos of completed work, and any written communications. A judgment in your favor allows you to pursue wage garnishment or property liens to collect.
Start with a professional proposal
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Create My Proposal →Frequently Asked Questions
What do I do if a client refuses to pay?
Follow this sequence: first send a formal written demand letter giving them 14 days to pay. If no payment, send a notice of intent to file a mechanic’s lien (this alone resolves many disputes). File the lien if payment is still not received. Then pursue small claims court for amounts within your state’s limit. For larger amounts consider consulting a collections attorney — many work on contingency for contractor payment disputes.
Can I stop work if a client hasn’t paid a progress payment?
Yes — in most states you have the right to suspend work if a client fails to make a required payment per the contract terms. Your proposal should include a clause stating: “Contractor reserves the right to suspend work if payment is not received per the agreed schedule. Work will resume within [X] business days of payment receipt.” Document any work stoppage in writing and notify the client formally.