Customer not paying your invoices? An attorney demand letter changes the conversation, and California gives you levers most sellers do not know about.

The five legal levers in a B2B invoice-collection matter

1. Breach of contract. The signed agreement (MSA, SOW, purchase order, services contract) creates the payment obligation. Damages are the unpaid balance plus consequential damages where the contract or law provides. The threshold inquiry is whether the contract was performed, delivered, or substantially complete.
2. Common counts (account stated, goods sold and delivered, services rendered, open book account). California Code of Civil Procedure §§ 337a and 337b allow recovery on these theories even where the contract is informal or where the parties operated on an established course of dealing. Account stated requires the customer's express or implied agreement to the balance.
3. Prejudgment interest. California Civil Code § 3287 allows prejudgment interest at 10% per year on liquidated, ascertainable amounts from the date the obligation became due. On contract debts, § 3289 applies: the contract rate if specified, otherwise 10%.
4. Attorney-fee shifting. California Civil Code § 1717 makes attorney-fee clauses reciprocal: even a one-sided clause favoring the seller becomes mutual. Standard MSAs / SOWs include attorney-fee clauses, which materially increases the customer's exposure once an attorney is involved.
5. Statutory enhancements (specific industries). California Business & Professions Code § 7100 (contractors), the prompt-payment statutes (Civ. Code §§ 8800-8830 for construction; Bus. & Prof. Code § 17500 for general unfair-competition), and federal Prompt Payment Act (federal contractors) all add penalties and faster timelines for specific industries.

Six B2B invoice-collection scenarios that often resolve at the demand-letter stage

Scenario 1: Customer claims dissatisfaction after delivery / completion

Services rendered or goods delivered, customer accepted, then withholds payment alleging defects or dissatisfaction. The leverage points: (a) acceptance evidence (signed delivery receipt, "looks great" emails, partial payment), (b) the contract's acceptance-and-cure mechanism, (c) the customer's failure to give written notice of defects within the contractual window.

Scenario 2: Customer rotated through "we'll pay next week" for months

The classic slow-pay. The customer is solvent but is stretching payables. Once a demand letter on attorney letterhead arrives, payment usually accelerates because the customer's in-house counsel or owner sees the attorney-fee exposure and the prejudgment interest exposure.

Scenario 3: Customer disappeared or stopped responding

Calls and emails go unanswered. Often the customer is preparing for liquidation, restructuring, or simply hoping the seller will give up. The leverage: a process-server-served demand or, for genuinely unresponsive customers, a complaint filed and served. Default-judgment recovery is faster than most sellers expect when the contract and invoices are clean.

Scenario 4: Customer alleges breach by the seller as an offset

Customer refuses payment claiming the seller breached. The leverage points: documentary record of performance, written customer acknowledgments of acceptance, prior-paid invoices from the same engagement, and whether the alleged breach was timely raised. Sellers often have a stronger position than they realize because the contract's notice-and-cure provision was bypassed.

Scenario 5: The customer is a corporate entity that has gone dark

The customer corporation is suspended, its filing status is delinquent, or its registered agent has resigned. The leverage: alter-ego liability against the principal where the corporate veil can be pierced, or successor liability if the business has been transferred to a new entity to escape obligations. The $240 written attorney consultation identifies whether veil-piercing facts are present.

Scenario 6: Recurring SaaS / subscription customer stops paying mid-contract

The contract has a stated term (12 months, 24 months, multi-year). Customer cancels payment mid-term. The leverage: liquidated damages clauses, accelerated balance clauses, MRR-based damages, and limitation on the customer's ability to terminate without cause. SaaS contracts also typically have arbitration clauses that affect the forum.

First-30-days action checklist after a customer non-payment

1. Stop sending casual reminders. Once the customer is past 60 days, casual emails reset the negotiation tone. Send a written demand letter that cites the contract section, the late-fee or interest provision, and a hard cure deadline.
2. Pull the contract and the entire correspondence record. Identify the attorney-fee clause, late-fee provision, prejudgment-interest rate, dispute-resolution forum (court vs arbitration), and venue.
3. Document the performance / delivery. Signed acceptance, delivery receipt, partial payments, customer testimonials or emails confirming satisfaction. These defeat the "we were dissatisfied" defense.
4. Calendar the limitations periods. California: 4 years for written contracts (CCP § 337), 2 years for oral contracts (CCP § 339), 4 years for open book accounts (CCP § 337a), 4 years for account stated (CCP § 337(2)).
5. Decide the forum. Small claims (under $12,500 for entities), limited civil ($12,500-$35,000), unlimited civil (over $35,000), or AAA arbitration if the contract requires.
6. Send the attorney demand letter. On attorney letterhead, certified mail plus email. Cites the contract, attaches the invoices, sets a 14-21 day deadline, references attorney-fee shifting, and signals next-step (filing or arbitration).
7. If the customer is at risk of insolvency, file fast. Default judgment can be obtained quickly when the customer is unresponsive. Once a customer files for bankruptcy, the automatic stay halts collection until the case is resolved.
8. Once judgment is obtained, enforce. Wage garnishment, bank levy, or judgment-debtor exam. California allows the prevailing creditor to recover post-judgment interest at 10%.