Your customer is a business. Collect like one.

NY CPLR § 5004 · CPLR § 213(2)

Why B2B receivables are a different problem.

When a consumer does not pay, you are often chasing a person with no assets and a dozen federal and state protections. When a business does not pay, you are chasing an entity that signed a purchase order, received invoices at a business address, booked the expense, and has a bank account. The claim is cleaner, the proof is better, and the debtor's cost of being wrong is higher. That is why commercial collection in New York rewards a more deliberate approach than sending a seventh reminder email.

If you run a small business and this is your first unpaid invoice, start with our general guide to unpaid invoices for New York small businesses. This page goes deeper: it is for receivables owed by another company, typically larger balances, where the question is not whether to act but how to act with the most leverage per dollar spent.

Attorney letter or collection agency? The honest math.

A collection agency takes a percentage of what it recovers, commonly somewhere between a quarter and half of the balance. On a $25,000 invoice, that is $6,000 to $12,000 of your money, for work that consists mostly of phone calls and form letters. An agency also cannot sue. If the debtor ignores it, the file comes back to you or gets referred to a lawyer anyway, now older and colder.

An attorney demand letter is a flat fee, fixed before you commit. It comes from someone who can actually file the lawsuit, which is the only thing a sophisticated debtor's accounts-payable department cares about. And because it is a letter rather than a campaign of calls, it tends to preserve the relationship. Many B2B debtors are customers you would take back once they pay. A lawyer's letter says “this is serious and we are organized.” An agency's calls say “we have written you off.”

Agencies still have a place: high volumes of small balances where nobody is going to sue anyway. We lay the comparison out fully in collection agency vs. attorney demand letter in New York.

Account stated: how silence becomes proof.

New York recognizes a claim called account stated. In plain terms: if you sent a business an invoice or statement of account, it received it, and it kept it without objecting within a reasonable time, the law can treat the balance as agreed. A partial payment on the invoice does the same job, because paying part of a bill is hard to square with disputing it.

This matters because it changes what you have to prove. On a breach of contract claim, you prove the agreement, your performance, and the shortfall. On an account stated claim, you prove the invoices went out, were received, and sat there. The debtor who never bothered to write back is now the party with the explaining to do. The full doctrine, with what it does and does not cover, is in account stated in New York.

A demand letter builds this record on purpose. It attaches the statement of account, notes that no objection was ever raised, and gives the debtor one more deadline to object or pay. Either answer helps you.

Interest: 9% a year, from the date it was due.

Under CPLR § 5004, New York's statutory interest rate is 9% per year on most commercial claims. (A lower rate now applies to certain consumer debt judgments against individuals; it does not apply to business receivables.) In a contract case, New York law allows that interest to run from the earliest date the claim existed, which for an invoice usually means the due date.

The arithmetic is what makes debtors move. A $40,000 invoice due fourteen months ago is already carrying about $4,200 in interest, and it adds roughly $300 a month. A demand letter that states the balance as principal plus accrued interest, with the daily rate, turns the debtor's delay into a visible expense. If your contract sets its own late fee or interest rate, different rules apply, including New York's limits on excessive interest. See late payment interest on New York invoices for how to compute both and what to put in the letter.

The deadline: six years, with a four-year exception.

A claim for breach of contract in New York must be brought within six years, under CPLR § 213(2). For an unpaid invoice, the clock generally starts when payment came due. One important exception: if the invoice is for the sale of goods rather than services, the Uniform Commercial Code's four-year period, UCC § 2-725, applies instead. A distributor chasing a retailer for product has two fewer years than a consultant chasing a client for work.

Six years sounds like plenty. In practice, receivables get harder to collect every quarter: the contact leaves, the debtor's finances deteriorate, records get lost. Our page on the statute of limitations for unpaid invoices in New York covers what restarts the clock, including partial payments and written acknowledgments.

The disputed-work screen.

A demand letter is the right tool for an undisputed invoice: the work was delivered, the goods were accepted, and the customer is simply not paying. It is the wrong first tool when the customer has a real complaint about quality, scope, or timing. If your customer has sent you a written rejection of the deliverables, or is withholding payment because of a specific defect, the account stated theory weakens (they objected) and the letter risks hardening a position rather than collecting a debt.

That does not mean you have no claim. It means the matter needs a conversation with a lawyer about the facts before anyone sends anything. We screen for this before drafting. If your situation is a genuine dispute, we will tell you, and the right move may be a negotiated resolution on paper rather than a demand. For the undisputed case, which is most of them, the letter is the fastest, cheapest form of pressure available.

What a demand letter does here.

For a B2B receivable, our letter does five things. It identifies the debtor by its exact legal name and registered address, so the claim lands on the right entity. It states the claims: breach of contract and account stated, with the statement of account attached. It computes the amount due as principal plus 9% interest, with a per-day figure. It sets a short deadline and names the forum we will use if the deadline passes. And it invites the debtor to object in writing if it contends any part of the balance is not owed, which, if they stay silent again, strengthens the account stated claim.

The letter goes by mail and email to the entity and, where there is one, to the individual who signed a personal guarantee. Guarantees change the calculation entirely: an owner who is personally on the hook tends to find the money the LLC did not have. If the customer has gone quiet altogether, the sequence in when a client ghosts an unpaid invoice covers how to find the right entity and what to do if it has dissolved.

When the letter does not work: choosing the court.

Most letters resolve the matter. When one does not, the size of the claim picks the court. In New York City, the Civil Court's commercial claims part is built for businesses with modest claims: fast, inexpensive, no lawyer required, and open to corporations and LLCs, unlike ordinary small claims, which is for individuals. Outside the city, city, town, and village courts have their own commercial claims parts with lower limits. Details and dollar limits are in commercial small claims in New York.

Larger receivables go to the Civil Court, which in New York City handles claims up to $50,000, or to the Supreme Court above that. There, the full toolkit is available: interest from the due date, attorney's fees if your contract provides for them, and, when a guarantee or a signed acknowledgment of the debt exists, accelerated procedures that can produce a judgment without a full trial. A plenary action costs more and takes longer, which is exactly why the letter comes first: it lets the debtor's own lawyer explain that defending the case will cost more than paying it.

Freelancer or vendor? The Freelance Isn't Free Act line. New York's Freelance Isn't Free Act gives individual freelancers a powerful statutory claim, including double damages and attorney's fees, when a hiring party does not pay. It does not reach most B2B receivables. The Act protects freelance workers, meaning sole proprietors and single-person operations, not a corporate vendor with employees invoicing another company. If you are a one-person shop, read the Freelance Isn't Free Act before anything else, because that claim is stronger than an ordinary contract claim. If you are a company with staff, you are on this page, and the tools are account stated, interest, and the courts above.

What to gather before you start.

• The contract, purchase order, statement of work, or signed proposal, plus any change orders.
• Every invoice and statement of account, with the dates sent and the addresses used.
• Proof of delivery or completion: signed receipts, acceptance emails, the deliverables themselves.
• Every payment received, with dates, and every written promise to pay.
• The debtor's exact legal name from the New York Department of State's entity search, and the name of any personal guarantor.
• Any written complaint or objection from the debtor, even one you think is meritless. We need to see it.

With that file, a letter can go out quickly. Our letters are flat-fee, drafted and signed by a New York attorney, and sent through DemandLetterNY. If the balance is too small to justify any legal spend, or the debtor is plainly insolvent, we will say so rather than sell you a letter.

Read next.

• Account stated in New York: how unanswered invoices become proof
• Late payment interest on New York invoices: contract rates vs. the statutory 9%
• Collection agency vs. attorney demand letter
• The client stopped answering: finding and serving the right entity
• Personal guarantees on unpaid invoices
• Statute of limitations for unpaid invoices in New York
• Commercial small claims in New York
• Demand letter vs. small claims