Collections checklist
Step-by-step: agencies, interest, and write-offs.
Work top to bottom. General information, not legal or tax advice.
Checklist
Sending an invoice to an agency
- ☐ Confirm the invoice is truly unpaid and past due
- ☐ Send at least two dated reminders
- ☐ Send a final written demand with a 7–10 day deadline
- ☐ Check your contract for arbitration or notice requirements
- ☐ Compare small-claims court costs against agency fees
- ☐ Verify the agency is licensed in the debtor's state
- ☐ Agree the contingency rate in writing
- ☐ Hand over a complete file: contract, invoice, proof of work, messages
Checklist
Charging interest
- ☐ Find the late-fee or interest clause in your contract or terms
- ☐ If none, look up your state's statutory interest rate
- ☐ Confirm the rate is under your state's usury cap
- ☐ Calculate interest from the due date, not the work date
- ☐ Show the rate and amount on the past-due invoice
- ☐ Apply the same policy to every customer
Checklist
Writing off bad debt
- ☐ Document every collection attempt
- ☐ Decide recovery would cost more than the invoice
- ☐ Confirm your accounting method (accrual or cash)
- ☐ Record the write-off in your accounting software
- ☐ Keep the evidence file with the tax-year records
- ☐ Ask a tax professional before claiming a deduction
- ☐ Report any later payment as income