A collections process that keeps the client

STEP 01 OF 10

Start every invoice as a “proper invoice,” not just a bill

Alberta's regulator publishes the exact requirements for what counts as a proper invoice: the contractor's name and business address, the invoice date, the period the work covers, a description of the work or materials, the amount requested, payment terms broken down, the name and contact information of the person to be paid, and a statement that the invoice is intended to be a proper invoice. Every clock this guide describes starts running from the date a proper invoice, not just any bill, is delivered.

An invoice missing even one of these eight elements is not a proper invoice under Alberta's regime, and an owner disputing payment on that technical ground has a real argument if the collections process cannot show the invoice met the standard. Build the invoice template to include every element as a matter of habit, not case by case.

STEP 02 OF 10

In Alberta, know the exact clock: 28 days to pay, 14 to dispute

Alberta's regulator states plainly: project owners must pay the amount payable within 28 calendar days of receiving a proper invoice. If an owner disputes the invoice, they must give notice to the contractor within 14 calendar days of receiving it, and that notice must state both the amount being withheld and the reasons for withholding it — a vague dispute notice does not satisfy the requirement.

Track both clocks from the same invoice date, not sequentially. The 14-day dispute window and the 28-day payment window both start on day zero; an owner who says nothing for 14 days has lost the right to dispute, even though 14 days remain on the payment clock.

STEP 03 OF 10

Know that Ontario's regulator publishes the mechanism, not the day counts

ODACC's own prompt-payment page is nearly all navigation text — it states that further amendments to the Construction Act came into force 1 January 2026, and directs readers to the Act itself for what counts as a proper invoice, but publishes no day count of its own. Do not build an Ontario collections process around a specific number of days quoted from a secondary source; build it around the mechanism — a proper invoice starts a fixed statutory clock, and a notice of non-payment must be delivered before that clock closes — and confirm the current figure with a lawyer before relying on it in a specific file.

Treadstone Law's own guidance does publish figures, with an explicit hedge attached: “as of writing” and “verify this timeline immediately with a lawyer, as the Act may have been amended.” Use that page as the starting point for an Ontario conversation, not as a number to state as settled fact in a collections letter.

STEP 04 OF 10

In British Columbia, do not assume a prompt-payment clock exists at all

British Columbia's Builders Lien Act contains no prompt-payment override. A pay-when-paid clause that would be struck down or overridden by statute in Ontario or Alberta can still operate exactly as written in a BC contract. A collections process built on the Ontario or Alberta mechanism, applied automatically to a BC project, is relying on a protection that simply is not there.

For BC work, the collections process has to lean harder on the contract's own payment terms and on the holdback and trust-account mechanics BC's Builders Lien Act does provide, rather than on a statutory prompt-payment clock that does not exist in that province.

STEP 05 OF 10

Escalate to a formal notice before the relationship, not instead of it

A collections escalation does not have to be adversarial to be effective. A formal notice of non-payment, sent inside whatever clock actually applies, is a documented step that protects the contractor's position — it is not, by itself, an ultimatum that ends the relationship. Pair the formal notice with a direct phone call from whoever has the client relationship, so the client hears from a person, not just receives a letter.

Keep the two channels separate on purpose: the formal notice satisfies the legal clock, and the phone call preserves the relationship. A process that only sends the letter, or only makes the call, is missing half of what this step is for.

Reserve the strongest step — adjudication, fast in Ontario at roughly six weeks to a determination, but formal and adversarial — for accounts where the relationship is not worth preserving anyway, or where the amount at stake justifies the cost regardless. Using adjudication on a client the firm still wants to work with again is usually a signal the earlier steps in this process were skipped, not that adjudication was the only option available.

STEP 06 OF 10

Track aging by invoice, and flag the specific point a file needs to escalate

See aging a holdback receivable for the related discipline of tracking retained holdback as it ages — the same aging logic applies to an unpaid invoice generally. Set a specific day count, tied to whichever province's clock actually applies, at which a file automatically moves from “follow up” to “formal notice,” rather than leaving the decision to whoever happens to be reviewing the receivables that week.

A collections process that relies on someone noticing an invoice is old will always be slower than one that flags it automatically at a defined threshold. Build the threshold into whatever accounting system tracks the receivable, not into a person's memory.

STEP 07 OF 10

Know when an invoice becomes a genuine bad debt, not just a slow one

ITA s. 20(1)(p) allows a bad-debt deduction once a debt is established to be genuinely uncollectible — not merely late. That determination should be a deliberate decision the firm makes and documents, not a default that happens automatically after some number of months of silence. Keep the collections effort itself, and the record of it, going until the point the firm actually concludes the debt will not be collected.

ETA s. 231 lets the firm recover the GST/HST it already remitted on a debt written off as bad, provided the claim is made within the four-year window in s. 231(4). If any portion of a written-off debt is later recovered, s. 231(3) requires recapturing the GST/HST portion of what came back.

STEP 08 OF 10

Recompute the GST/HST recovery correctly when a bad debt is written off

The GST/HST recovery under ETA s. 231 is proportional to the GST/HST-inclusive amount originally billed, not the full invoice amount alone. Work the math from the actual invoice, including the tax that was charged and remitted on it, rather than assuming the entire face value of the debt is what gets recovered.

If a later, partial recovery happens — a settlement, a partial payment from an insolvency process — recapture only the proportional GST/HST share of that specific recovery, using the same ratio the original write-off was calculated on, not the full recovered amount.

STEP 09 OF 10

Keep the collections file, including every notice sent, for the same six years as the rest of your records

ITA s. 230(4)(b) sets the general six-year record-retention clock, and a collections file — every invoice, every notice of non-payment, every dispute response — is exactly the kind of record that clock covers. A firm that pursues a bad-debt deduction or a GST/HST recovery under step eight needs the underlying collections documentation to survive an audit of that claim, not just the accounting entry.

Store the collections file with the same discipline as the job-cost and contract records for the project it relates to, rather than as a separate, informal folder that is easy to lose track of once the account is resolved one way or another.

STEP 10 OF 10

Decide in advance which accounts get the full process, and which don't

Not every slow payment justifies running every step in this guide. Set a threshold — by dollar amount, by client relationship value, or both — below which a lighter-touch follow-up is the proportionate response, and above which the full formal-notice-and-tracking process applies from day one. A process that treats every invoice identically either over-escalates small, genuinely minor delays or under-escalates the accounts that actually need the discipline.