Provider guide · Collections
Collecting an unpaid invoice: agencies, interest, and write-offs.
When demand letters and platform disputes stall, these are the next options. General information, not legal or tax advice.
Collection agencies
How to send an unpaid invoice to collections.
Follow these steps in order so each one strengthens the next.
- 01
Send a final written demand
State the amount, the invoice or work order number, the completion date, and a 7–10 day deadline. Say the debt will be referred to collections if unpaid.
- 02
Check your contract first
Some platform and buyer agreements require arbitration, a notice period, or a dispute process before any third-party collection.
- 03
Choose a licensed agency or attorney
Confirm the agency is licensed in the debtor's state. Most work on contingency — commonly a percentage of what they recover — rather than an upfront fee.
- 04
Hand over a complete file
Contract or work order, invoices, proof of completion, every message, and your payment history. A clean file recovers faster.
- 05
Consider small-claims court instead
For smaller amounts, small claims is often cheaper than an agency's cut, and you keep the full amount if you win.
Interest on past-due invoices
- Contract rate: if your terms include a late-fee or interest clause, you can generally charge that agreed rate.
- Statutory rate: without a clause, many states allow interest on past-due debts once payment is demanded or a suit is filed. Rates vary by state.
- Caps: some states limit late fees or interest. A rate above the legal limit can weaken an otherwise strong claim.
- Consistency: put the rate and due date on every invoice, and apply it the same way to every customer.
Writing off bad debt
- Bad debt you can write off is generally income you already reported. Cash-basis filers usually can't deduct an invoice they never counted as income.
- Document collection attempts — demands, dispute tickets, agency referrals — before writing a debt off.
- Writing off a debt for tax purposes doesn't stop you from still trying to collect it, or from adding it to a group claim.
- Tax rules differ by business type and situation. Ask a tax professional before you claim a deduction.
Is the unpaid invoice from Field Nation work? Read about the case and its provider FAQ.