The Michigan Contractor's Guide to Getting Paid

Every town this magazine has ever written about is standing because somebody kept it standing. The Greek Revival storefronts in Marshall, the company houses stair-stepping up the hills in Calumet, the Victorian commercial blocks that give a dozen West Michigan main streets their whole visual identity — none of that survived a century and a half of freeze-thaw cycles on charm alone. It survived because a long, unbroken line of carpenters, masons, roofers, electricians, and plumbers showed up and did the unglamorous work of replacing what the weather took. Michigan is a state that runs hard on its trades, and it always has been.

What follows is a guide to the part of that work nobody romanticizes: the licensing, the lien deadlines, the deposits, and the invoices. It is written for the person who is genuinely good at the craft and genuinely tired of the paperwork — the sole operator who does excellent tile work and has forty thousand dollars in uncollected invoices sitting in a truck console, the two-person outfit that has never quite figured out when to ask for a deposit, the growing crew that suddenly needs to track hours across three job sites. Michigan's rules here are specific, they are enforced, and a surprising number of otherwise-competent contractors learn them the expensive way.

Why Michigan Keeps the Trades Busy

Start with the housing stock, because it explains the demand. Nationally, the typical owned home is around forty years old, with roughly half built before 1980 — and Michigan skews older than that in its established cities and its lakeshore resort towns, where the desirable housing was built long before anyone had heard of a vapor barrier. An old house is not a problem; an old house is an annuity. Every one of them will eventually need a roof, a service upgrade, a foundation repair, a bathroom that no longer has a cast-iron drain line, and a furnace that does not date to the Ford administration. Multiply that across a state with Michigan's building inventory and you get a permanent, non-cyclical baseline of work that exists whether or not anyone is building anything new.

Layer onto that a workforce problem running in the opposite direction. State workforce figures put Michigan's professional trades north of half a million jobs, with tens of thousands of openings projected every year through the end of the decade. The national picture behind those numbers is the real story: the median tradesperson is now in their mid-forties, only about one in six construction workers is under thirty-five, and roughly a fifth of working electricians are over fifty-five. Retirements are outpacing apprenticeships. For anyone currently holding a license and a truck, that math is unambiguously good news — demand is structural, not a boom that will correct. The constraint on a Michigan trades business in 2026 is almost never finding work. It is getting paid for the work you already did, fast enough to make payroll on the work you are doing now.

The License Question: Builder vs. Maintenance & Alteration

Michigan draws its licensing line at a number that surprises people the first time they hear it: six hundred dollars. Anyone who contracts with a property owner to perform residential construction or remodeling on a project with a total value of $600 or more — counting materials and labor together — is required to hold either a residential builder license or a maintenance and alteration contractor license. That threshold has not moved in a very long time, which means it now captures an enormous amount of work that feels casual. A single decent-sized deck, a bathroom tile job, a handful of replacement windows: all comfortably over six hundred dollars, all requiring a license.

The distinction between the two license types is one of scope. A residential builder license covers the construction of a residential structure as a whole — the person who can put up the house. A maintenance and alteration contractor license covers specific trades and specialties applied to existing structures, and it is issued by category, so an applicant qualifies in the particular trades they actually perform rather than across the board. For a great many working contractors — the remodeler, the roofer, the siding installer, the finish carpenter — the maintenance and alteration route is the correct and sufficient one. Both licenses run through the Bureau of Construction Codes at Michigan's Department of Licensing and Regulatory Affairs, and both are subject to the same prelicensure education requirement.

It is worth being blunt about why this matters beyond the abstract fact of compliance. Operating unlicensed in Michigan is not merely a paperwork risk; it strips away the single most important collection tool the state gives contractors. As the lien section below covers, a residential contractor who is not properly licensed has no lien rights at all. An unlicensed contractor who does forty thousand dollars of excellent work for a customer who then simply declines to pay has meaningfully fewer options than a licensed one — and has them in a legal posture where the customer's attorney will lead with the licensing question. The license is not bureaucratic overhead. It is the foundation of your ability to enforce getting paid.

Sixty Hours Before You Ever Pick Up a Pencil

Before sitting for either exam, Michigan requires 60 hours of approved prelicensure coursework, structured so that at least six hours falls in each of the required subject areas. Those areas are revealing in themselves, because only a minority of them are about building anything: business management, estimating, and job costing; design and building science; contracts, liability, and risk management; marketing and sales; project management and scheduling; the current Michigan residential code; and construction safety standards. Read that list again and notice how much of it is business curriculum. The state has essentially concluded that the way contractors fail is not by cutting a rafter wrong — it is by underbidding, mismanaging a contract, and running out of cash.

That framing is the single most useful thing in the entire licensing process, and it is the reason this guide spends more words on invoicing than on code. Estimating and job costing sit right at the front of the required curriculum because a contractor who does not know their true cost per hour will bid work that loses money in a way that is invisible until the year is over. Contracts and risk management are there because the difference between a collectible debt and an unenforceable one is usually a document signed before the work started. The state is telling you, in the form of a course catalog, exactly where the failure modes are.

What the Construction Lien Act Actually Requires

Michigan's Construction Lien Act, Public Act 497 of 1980, is the mechanism that turns unpaid work into a legally enforceable claim against the property itself. It is also a statute with hard deadlines that courts enforce strictly, and missing one does not generate a warning letter — it simply extinguishes the right. Three dates matter more than the rest, and every contractor working residential jobs in this state should have them memorized.

First, the claim of lien must be recorded within 90 days of the last date you furnished labor or materials to the project. Not ninety days from the invoice, not ninety days from the last argument about the invoice — ninety days from the last day you actually worked or delivered. Second, subcontractors and suppliers generally must serve a Notice of Furnishing within 20 days of first furnishing labor or materials, directed to the designee and general contractor named in the Notice of Commencement. Twenty days is short, it starts running at the beginning of your involvement rather than the end, and it is the deadline most often blown by subs who assume the paperwork can wait until there is a problem. Third, on residential work, sworn statements flow up the chain — general contractor to owner, subcontractor to general contractor — before progress and final payments are made.

And running underneath all of it is the licensing requirement already discussed: on residential projects, only properly licensed residential builders and maintenance and alteration contractors possess lien rights in the first place. The practical takeaway is that lien protection is not something you reach for after a customer stops returning calls. It is a documentation discipline that has to be running from day one of every job, on every job, including the ones where the customer seems lovely and the handshake seems sufficient. The jobs that go bad are rarely the ones you expected to.

The Cash-Flow Problem Nobody Warns You About

Here is the shape of the problem that quietly kills small trades businesses, and it has almost nothing to do with profitability on paper. A contractor buys materials on Monday, pays a crew on Friday, finishes the job two weeks later, sends an invoice, and then waits. Thirty days pass. Forty-five. The customer is not malicious; the customer is busy, or waiting on their own money, or simply operating on the assumption that an invoice from a small contractor is a soft deadline in a way an invoice from a utility is not. Meanwhile the next job has already started, which means more materials and another payroll, funded out of a bank balance that is still waiting on the last job.

A business can be genuinely profitable on every single job and still fail here, because profit and cash are not the same thing and only one of them makes payroll. The lag between doing the work and holding the money is the entire risk, and it compounds as you grow — a bigger crew means bigger payroll obligations landing before bigger receivables arrive. This is why so many capable tradespeople hit a hard ceiling at the point where they would need to hire a third or fourth person, and mistake a cash-flow constraint for a demand constraint.

The other half of the problem is emotional, and it deserves saying plainly because it is nearly universal. Chasing payment is unpleasant. You did good work for people who were, in most cases, perfectly nice to you. Calling them repeatedly to ask for money feels like an accusation, so the call gets postponed — a week, then a month — and the older an invoice gets, the harder it becomes to collect and the more awkward the conversation feels. Most contractors are not bad at collections because they lack the skill. They are bad at collections because the task is socially uncomfortable and there is always something more pleasant to do with the evening.

Building an Invoicing System That Chases for You

The structural fix for an uncomfortable recurring task is to remove the human decision from it. If a polite reminder goes out automatically on day seven, and again on day fourteen, and again on day thirty, nobody has to decide each morning whether today is the day to make an awkward phone call — the system already decided, the tone is consistent, and the customer experiences it as routine bookkeeping rather than personal confrontation. This is, not coincidentally, the reason most customers pay their utility bills on time and their contractor invoices late: one of those creditors follows up like clockwork and the other one feels bad about it.

Trades Chaser is an invoicing and CRM platform built specifically around this problem, and its entire premise fits in its own tagline: get invoices paid without the awkward calls. The core of it is customers, jobs, and invoices tied together the way a trades business actually operates, with automatic follow-up sequences handling the chasing so the contractor does not have to. Around that core sit the things a working crew needs day to day — quotes and a calendar, income, expense, and budget tracking, hour tracking for crew members, team accounts with shared access, and a subcontractor book of business with bid requests for outfits that farm work out.

Several features map directly onto the specific Michigan realities described above. Progress and milestone invoicing with deposits addresses the cash-flow lag at its source rather than treating the symptom. Multiple payment methods on every invoice removes the friction excuse, which matters more than it sounds — a meaningful share of late payment is not reluctance but inconvenience. Custom branding on invoices and quotes does quiet work on the psychology of the thing, because an invoice that looks like it came from a real business gets treated like one. A newer layer of AI tooling handles the administrative sludge: receipt scanning, a business assistant sidebar, drafted customer check-in emails, part identification with price comparison, and assisted job scheduling. And because it installs as an app directly from the browser, there is no app-store dependency to manage — it goes on a phone in the truck the same day.

Pricing is deliberately sized for the sole operator rather than the enterprise: the Base plan runs $10 per month or $108 per year, and the Enhanced plan runs $30 per month or $324 per year, with yearly billing saving ten percent and free trials on both. For context against the problem it solves, a single invoice that gets collected in fourteen days instead of sixty covers a year of the base plan several times over. Whatever tool you land on — and there are others — the principle holds: the follow-up has to happen without requiring you to feel like the bad guy every Tuesday evening.

Deposits, Milestones, and the Art of Not Financing the Job

The most consequential change most small contractors can make has nothing to do with software. It is structuring the payment schedule so that the contractor is never the one financing the customer's project. A deposit collected before materials are purchased means the supply house is paid with the customer's money rather than yours. Progress payments tied to defined milestones — demo complete, rough-in inspected, drywall hung, substantial completion — keep the outstanding balance small at every point in the job rather than letting it balloon to the full contract value on the final day, which is precisely the moment your leverage is lowest and the customer's motivation is weakest.

Milestone billing also converts a vague relationship into a documented one, which is exactly what the Construction Lien Act rewards. Each milestone generates a dated record of work furnished and payment applied, and that record is the raw material of a sworn statement or, if it comes to it, a lien claim. Contractors who bill in milestones tend to discover a secondary benefit almost immediately: disputes surface early and small, at the rough-in payment rather than at the end, when they are still cheap to resolve and the working relationship is still intact. The final-payment blowup is usually a problem that was visible weeks earlier and had no scheduled moment to be raised.

Working Up North: Seasonal and Second-Home Realities

Contractors working the resort belt — the Traverse City peninsulas, the Petoskey and Harbor Springs shoreline, the inland lakes, the Keweenaw — operate under a different set of constraints than their downstate counterparts, and the invoicing implications are real. A large share of the client base does not live at the property. The owner is in Chicago or Detroit or Grand Rapids, the work happens while they are away, and the invoice arrives by email to someone who has not seen what they are paying for. Documentation stops being good practice and becomes the entire basis of trust: photographs at each milestone, itemized descriptions of what was actually done, and a paper trail that answers the absentee owner's questions before they think to ask them.

Then there is the season. Northern Michigan compresses an enormous amount of exterior work into a window that runs roughly from the last hard frost to the first, and cottage owners overwhelmingly want work finished before they arrive for the summer or completed after they leave in the fall. That produces a brutal annual cash rhythm — a frantic build season followed by a thin winter — and it makes collection speed disproportionately important. An invoice that takes seventy-five days to collect in September is a January payroll problem in a way the same invoice simply is not in a market with year-round work. Contractors in these markets who survive long-term almost universally do two things: they take real deposits, and they get the winter's operating cash collected before the leaves turn.

Common Questions

Do I need a license for small residential jobs? If the total value of the contracted work — labor and materials combined — reaches $600 or more, Michigan requires a residential builder or maintenance and alteration contractor license. That threshold captures far more work than most people assume.

How long do I have to file a construction lien? Ninety days from the last date you furnished labor or materials. Subcontractors and suppliers generally must also serve a Notice of Furnishing within twenty days of first furnishing, which is the deadline most often missed.

Can I lien a residential property if I am not licensed? No. On residential work, lien rights belong only to properly licensed residential builders and maintenance and alteration contractors. This is the sharpest practical consequence of working unlicensed.

What does the prelicensure requirement involve? Sixty hours of approved coursework with at least six hours in each required subject, spanning business management and job costing, design and building science, contracts and risk, marketing and sales, project management, Michigan residential code, and safety standards — after which you sit for the exam.

What is the single highest-leverage change for a small trades business? Restructure when money arrives rather than trying to work harder at collections. A real deposit plus milestone billing removes most of the cash-flow gap, and automated follow-up removes the emotional friction from whatever balance remains.