How to collect an unpaid invoice, step by step
Key takeaways
Most late invoices get paid after a reminder and a phone call. Do both before anything formal.
A demand letter with a firm date is the turning point, and it is the first document a judge will ask to see.
Small claims court handles most business invoices under your state's limit without a lawyer. In Texas the limit is $20,000.
Texas gives you four years to sue on a debt, but contacts, records and the client's cash fade much faster. Act at 30 to 60 days.
How do you collect an unpaid invoice?
Work through six steps in order and stop as soon as you are paid. Each step takes a little more effort than the last, and each one builds the paper trail the next step needs.
Check the invoice is actually due
Confirm the payment terms, the due date and that the client received the invoice. Plenty of late invoices are sitting in the wrong inbox or waiting on a purchase order number.
Send a short reminder with a pay link
Name the invoice number, the amount and the due date. Our payment reminder templates cover the before-due, 7-day and 30-day emails.
Call the person who approves payments
Email is easy to ignore. Ask whether anything is holding the invoice up. If they agree to pay, confirm the date in writing the same day.
Send a demand letter
At around 30 days, send a formal letter with the amount, a pay-by date 10 to 14 days out, and the step you will take next. The free demand letter builder drafts one in a few minutes.
File in small claims court
If the deadline passes, file against the client's exact legal entity in the right county. Our guide to small claims for an unpaid invoice walks through filing, service and the hearing.
Collect the judgment
Winning gets you a judgment, not a check. If the client still does not pay, post-judgment tools such as an abstract of judgment or a writ of execution come next. Here is how that works for a Texas judgment.
When should you escalate?
Escalate on a schedule you set in advance, not on the day you finally lose patience. A typical timeline for a net 30 invoice looks like this.
| Days past due | Step | Your cost |
|---|---|---|
| 0 to 7 | Reminder email with a pay link | Free |
| 7 to 21 | Phone call, then a written recap | Free |
| 30 | Final notice with a pay-by date | Free |
| 30 to 45 | Demand letter by email and certified mail | Postage, or $99 with Easy Small Claims |
| 45 to 60 | File in small claims court | Court and service fees, set by your county |
What does it cost to collect an unpaid invoice?
The options cost very different amounts. The cheapest one depends on the size of the invoice and whether the client is still trading.
| Option | What you pay | Best for |
|---|---|---|
| Doing it yourself | Your time, plus court fees if you file | Owners with time and a clean paper trail |
| Collection agency | Often 25% to 50% of what is collected | Large volumes of small debts |
| Collections lawyer | Hourly, or often a third on contingency | Claims above the small claims limit |
| Easy Small Claims | $99 to start, $299 in total if we file, you keep 100% | Business invoices from $1,000 to $20,000 |
What actions are not allowed when collecting an invoice?
Pressure only works while it stays lawful. Avoid these, however angry you are.
- Threatening criminal charges or jail over an unpaid bill.
- Telling the client's customers, staff or followers about the debt.
- Holding the client's files or property unless your contract allows it.
- Adding fees or interest your contract never mentioned.
If the debt is a person's own consumer debt rather than a business invoice, the federal debt collection rules and state laws add more limits. Check them before you send anything.
How long do you have to collect?
Each state sets a statute of limitations for suing on a debt. In Texas it is four years. Other states set different periods for written and oral agreements. The practical deadline is much shorter, because the longer an invoice sits, the harder the contact, the paperwork and the money become to find.
Last updated October 2026. Easy Small Claims is not a law firm and this guide is general information, not legal advice.
Questions, answered
How do you collect money from a client who won't pay?
Start with a written reminder that names the invoice, the amount and a pay link, then call the person who approves payments. If there is still no payment after about 30 days, send a demand letter with a firm deadline. If the deadline passes, you can file a small claims case for the amount plus court costs.
Can I take a client to small claims court for an unpaid invoice?
Yes, if the amount fits your state's small claims limit and you sue the client's correct legal entity. Limits run from about $5,000 in some states to $20,000 or more in others, including Texas. Most business owners handle these cases without a lawyer, and court costs are usually added to the judgment if you win.
How long can an invoice go unpaid before legal action?
There is no required waiting period. Most businesses act at 30 to 60 days past due, after reminders and a demand letter. The legal deadline is the statute of limitations, which is four years for a debt in Texas and differs in other states. Waiting longer rarely helps, because records and the debtor's cash get harder to find.
Should I use a collection agency for an unpaid invoice?
A collection agency suits large volumes of small debts, but it usually keeps a share of what it recovers, often 25% to 50%, and many decline small business invoices. If the debtor is a business that still operates and the amount fits your state's small claims limit, filing yourself usually keeps more of the money.
Practicing barrister and founder of QuickAds. Built Easy Small Claims so small businesses can recover invoices they would otherwise write off.