Invoice Recovery & Late Payment Tools for US Freelancers & Businesses
Unlike the UK, the US has no single federal law covering private B2B late payment. Your rights depend on your contract terms and your state. This guide explains the landscape, your options at each stage, and provides free tools to help you chase, calculate fees, and escalate effectively.
US Late Payment Laws — State by State
The US does not have a federal equivalent to the UK's Late Payment of Commercial Debts Act. For private B2B contracts, your options depend primarily on your contract and your state:
Federal Prompt Payment Act
The Prompt Payment Act (31 U.S.C. § 3901) requires federal government agencies to pay invoices within 30 days. If a federal agency pays late, you are automatically entitled to interest at the rate set by the Treasury Department (historically 1–5% per year). This does not apply to private B2B contracts.
State Prompt Payment Acts
Many states have Prompt Payment Acts covering state government contracts and construction industry payments. These typically require payment within 30–45 days and impose interest automatically. Notable examples:
- California: Businesses must pay undisputed invoices within 30 days under Cal. Civil Code § 3287 for government contracts; commercial B2B is contract-governed
- Texas: Texas Prompt Payment Act (Gov. Code Ch. 2251) requires state agencies to pay within 30 days; private B2B governed by contract
- New York: State Finance Law § 179-d requires state agencies to pay within 30 days; NYC has a Local Law 42 requiring city agencies to pay small businesses within 30 days
- Florida: Florida Prompt Payment Act (§ 218.70) covers local government and construction; private B2B is contract-governed
Private B2B Contracts — What Governs
For private B2B contracts (most freelance and small business work), the following determines your rights:
- Your contract payment terms (Net 30, Net 60, etc.) — these are legally binding
- Your late fee clause — only enforceable if disclosed before work began
- State usury laws — some states cap interest rates even for commercial contracts
- UCC Article 2 applies to contracts for the sale of goods (not services)
- State contract law governs breach of contract claims for non-payment
Key Takeaway for US Freelancers
Because the US has no automatic late payment interest for private B2B contracts, your contract is everything. Include clear payment terms (Net 30 recommended), a specific late fee clause (1.5%/month is standard and enforceable in most states), and get the client to sign before work begins. Without a signed contract, collecting late fees is significantly harder. See Nolo's small claims guide for state-by-state filing limits and procedures.
Free US Invoice Recovery Tools
All tools are free, browser-based, and require no signup.
Late Fee Calculator
Calculate exactly how much late fee your US client owes. Supports monthly %, annual %, and flat fee rates — check your state's usury limit first.
Payment Reminder Email Generator
Generate professional payment reminder emails in 5 escalation tones — from friendly to final notice before legal action.
Invoice Follow-Up Schedule Planner
Build a complete chase timeline from your invoice due date. Helps you stay systematic without being aggressive.
Days Sales Outstanding Calculator
Calculate your DSO and compare it to industry benchmarks. See how much working capital slow payers are costing you.
US Invoice Collection Timeline
A proven escalation sequence for chasing unpaid invoices in the US.
Send a friendly first reminder
Most late payments in the US are accidental — the invoice got lost, went to spam, or is stuck in AP approval. A brief, non-accusatory reminder resolves the majority.
Follow-up with firm reminder + invoice copy
Attach a fresh copy of the invoice. Reference the original due date. Ask if there are any issues preventing payment.
Introduce late fee (if in your contract)
If your contract includes a late fee clause, this is the point to reference it. Quantify the exact fee: 'A late fee of $X has been applied per our agreement.' Attach a revised invoice.
Send formal demand letter
A written demand letter is important evidence if you later go to small claims court. Give 10–14 days to pay and state you will pursue legal remedies.
File small claims or consider collection agency
For amounts within your state's small claims limit, file at your local courthouse or online. For larger amounts, consult an attorney or a collection agency.
Consider write-off or collection escalation
After 90 days, collection probability drops significantly. Weigh the cost of continued pursuit against the invoice amount. A written-off bad debt may be tax deductible.
US Small Claims Court — What You Need to Know
Small claims court is the most practical option for recovering unpaid invoices under your state's limit without a lawyer. Each state sets its own rules, limits, and fees.
How to File
- 1Find your local small claims court (search your county courthouse website)
- 2Complete the claim form — you'll need defendant's full legal name and address
- 3File and pay the filing fee ($30–$150 in most states)
- 4Serve the defendant (sheriff service, certified mail, or process server depending on state)
- 5Attend the hearing — bring all documents organized
- 6If you win, collect via wage garnishment or bank levy
What to Bring
- Signed contract or written proposal with payment terms
- All invoices with amounts and due dates
- Proof of work delivered (emails, files, delivery confirmation)
- Your complete chase history (emails, texts, voicemail logs)
- Any promises to pay (screenshots, emails)
- A clear written summary of your claim (1 page)
Tip: If the defendant is a corporation, you may need to serve their registered agent. Look up the registered agent in your state's Secretary of State business database.
State Small Claims Limits
Small claims limits as of 2026. Confirm with your local courthouse as limits change periodically.
| State | Small Claims Limit | Filing Fee Range |
|---|---|---|
| California | $12,500 | $30–$75 |
| New York | $10,000 | $15–$50 |
| Texas | $20,000 | $31–$156 |
| Florida | $8,000 | $55–$300 |
| Illinois | $10,000 | $30–$100 |
| Pennsylvania | $12,000 | $44–$131 |
| Ohio | $6,000 | $25–$65 |
| Georgia | $15,000 | $40–$70 |
| Washington | $10,000 | $14–$43 |
| Colorado | $7,500 | $31–$55 |
For claims above the small claims limit, you'll need to file in civil court — consider consulting an attorney. Collection agencies typically charge 25–50% of recovered amounts, which may be worthwhile for large or complex debts.
Frequently Asked Questions — US Late Payment
Is there a federal law that requires US businesses to pay invoices on time?+
There is no general federal law that mandates timely B2B payment for private contracts. The federal Prompt Payment Act applies to federal government contracts — requiring agencies to pay within 30 days. Several states have Prompt Payment Acts for state government contracts, and the construction industry has specific lien laws. For private B2B contracts, your contract terms and state law govern payment obligations.
Can I charge late fees on invoices in the US without a contract clause?+
Generally, no. In the US, late fees are only enforceable if they were disclosed before the work was completed — either in your contract, proposal, or prominently on your invoice. Retroactive late fees are not enforceable in most states. Some states also cap interest rates on commercial invoices, so check your state's usury laws. The safest approach is to include a late fee clause in every contract.
What is the statute of limitations for suing on an unpaid invoice in the US?+
It varies by state and the type of contract. Written contracts generally have a longer statute of limitations (often 4–6 years) than oral contracts (2–4 years). California allows 4 years for written contracts; New York allows 6 years; Texas allows 4 years. Once the statute of limitations passes, you lose the right to sue — so don't delay escalation on seriously overdue invoices.
How does small claims court work for an unpaid invoice in the US?+
Small claims court is designed for self-representation without a lawyer. You file a claim at your local courthouse (or online in many states), pay a small filing fee ($30–$100 typically), serve the defendant, and attend a hearing. Bring your contract, invoices, emails, and proof of delivery. Judges typically rule quickly — often at the hearing itself. If you win, you get a judgment, which you can then use to garnish wages or bank accounts.
What should I do if a US client disputes my invoice?+
First, respond in writing and request the specific basis for the dispute. Review your contract and scope of work documentation. If the dispute is over scope, try to resolve it with a credit or partial payment. If the dispute appears to be a delay tactic, send a formal demand letter giving 14 days to pay or you will pursue legal action. Keep all communications in writing. Use the InvoiceGrid reminder generator to draft appropriate escalation emails.
Stop Chasing. Start Collecting.
InvoiceGrid tracks every invoice, logs every chase attempt, and generates the right email at the right time — so you have a documented paper trail if you need to escalate to small claims court.
- ✓See all overdue invoices in one Kanban board — nothing slips through
- ✓Generate demand letters and escalation emails in 30 seconds
- ✓Full chase log per invoice — critical evidence for small claims court
Also useful: Late fee calculator · Demand letter templates · Small claims court guide · How to chase unpaid invoices · DSO calculator