Doing the work is only half the job — getting paid is the other half, and it's where a lot of subs and handymen lose money they already earned. Set the terms up front, invoice cleanly, and have a plan for when a payment runs late.
A note on sources. The how-to here is industry best-practice. The legal pieces — deposit caps, prompt-payment deadlines, late-fee rules, and mechanic's lien deadlines — are state law and vary a lot; treat the numbers as typical, and confirm your state.
Set the terms before you start
The best collections tool is a clear contract signed before work begins. Put these in writing:
- A deposit to start — covers materials and commitment.
- A payment schedule — when each payment is due (by milestone or by date).
- A late fee — a percentage per month on overdue balances. It's only collectible if it's written in the contract. A common figure is 1.5% per month (18%/yr).
Deposits and progress billing
- Deposit. Many contractors take 25–50% up front on residential work — but some states cap it. California, for example, limits a home-improvement deposit to $1,000 or 10% of the contract, whichever is less, and over-collecting is a crime. Check your state before you set a number.
- Progress billing. On bigger jobs, bill in slices tied to milestones instead of waiting for the end. Each draw keeps cash flowing and limits what you're owed at any moment.
- Retainage. On some jobs the customer holds back 5–10% until completion — plan your cash around it.
The invoice that gets paid
A clean invoice gets argued with less and paid faster:
- Itemized scope, a clear total, and the balance due.
- A due date and your payment terms (net-15, net-30, etc.).
- Accepted payment methods, and the late-fee note from your contract.
AWJ Trades HQ generates numbered invoices from your estimate, so the billed doc matches the bid.
When a payment runs late — the ladder
Escalate in steps; most late payments clear on the first or second:
- Day after due: a friendly reminder (email or text).
- Within a week: a phone call — a real conversation clears most holdups.
- Around 15 days: a formal demand letter referencing the contract terms and any late fee.
- Still unpaid: talk to a pro about your options (below) before more time passes.
Mechanic's lien — the last resort
A mechanic's lien is a legal claim against the property for unpaid work — often your strongest leverage. Two things to know:
- The deadlines are strict and state-specific — commonly 60–120 days from your last day of work, sometimes measured from project completion. Miss it and you lose the right. Some states also require a preliminary notice filed early in the job to preserve it.
- Get help. A misfiled lien can backfire, so use a lien-filing service or an attorney rather than winging it, and start well before the deadline.
On lien waivers: you'll be asked to sign these to release lien rights for a payment. A conditional waiver only takes effect once the payment clears — safe. Never sign an unconditional waiver before the check clears.
Quick-start checklist
- Put deposit, payment schedule, and late fee in a signed contract before starting
- Check your state's deposit cap before setting the up-front amount
- Bill in progress draws on bigger jobs; plan for any retainage
- Send a clean, itemized invoice with a clear due date and terms
- Follow the late-payment ladder: reminder, call, demand letter
- Know your state's mechanic's-lien deadline and preliminary-notice rule
- Only sign conditional lien waivers, and only for payments that have cleared
Sources
The how-to is construction-industry best-practice; the legal figures are state-specific.
Deposit caps, prompt-payment deadlines, late-fee limits, and lien deadlines are set by state law — verify with your state contractor board or an attorney.