Georgia lets a business charge interest of up to 1.5% per month on a commercial account balance that has been due 30 days or more (O.C.G.A. § 7-4-16). With no agreed rate, the legal rate is 7% a year (§ 7-4-2). An attorney's fee clause in a signed note or credit agreement is enforceable under § 13-1-11, capped at 15%, but only after you give the debtor written notice and 10 days to pay without fees.
Slow payment is one of the most common cash-flow problems for small businesses and trade companies. Good invoices and credit terms won't make every customer pay on time, but they decide what you can add to the balance when someone pays late, and how much leverage you have when you finally send the account to a lawyer.
This guide covers business-to-business commercial accounts. Consumer sales, retail installment contracts, and construction lien rights have their own rules; for lien deadlines see our Construction Payment Guide.
When a commercial account is due
Under O.C.G.A. § 7-4-16, "unless otherwise provided in writing signed by the obligor, a commercial account becomes due and payable upon the date a statement of the account is rendered." In other words, the clock starts when you send the invoice or statement, unless the customer signed something setting different terms. A "commercial account" is an obligation to pay for goods or services sold or furnished, other than a consumer retail installment transaction.
The practical lesson: send statements promptly and keep proof of when you sent them. An unsent invoice doesn't start anything.
Interest on past-due commercial balances: up to 1.5% a month
The same statute says the owner of a commercial account "may charge interest on that portion of a commercial account which has been due and payable for 30 days or more at a rate not in excess of 1 1/2 percent per month," from the date it became due until paid.
- It's a ceiling, not an automatic entitlement. You may charge up to 1.5% a month; you can choose less.
- It applies only to the part of the balance that's been due for 30 days or more.
- Put the rate on your credit application, terms, and invoices. A customer who signed terms disclosing the rate is in a much weaker position to dispute it.
- Don't label a flat percentage as a "late fee" and stack it on top of interest without advice. Keep charges inside what the statute and your signed terms allow.
No agreed rate? Georgia's legal rate is 7%
When a written contract doesn't set a rate, Georgia's legal rate is "7 percent per annum simple interest" (O.C.G.A. § 7-4-2). Parties can agree in writing to other rates within limits, and for loans and advances of money, charging more than 5% per month is criminal usury under § 7-4-18. A fixed, certain debt (a "liquidated demand") bears interest from when it became due, or from demand if it's payable on demand (§ 7-4-15).
Attorney's fee clauses: how § 13-1-11 works
Many credit applications and notes say the customer will pay "attorney's fees" if the account goes to collection. Under O.C.G.A. § 13-1-11, a clause to pay attorney's fees on "any note or other evidence of indebtedness" is enforceable when the debt is collected by or through an attorney after it's due, with these rules:
- If the clause states a percentage, it's enforceable "up to but not in excess of 15 percent of the principal and interest owing."
- If it says "reasonable attorney's fees" without a percentage, the statute reads it as 15% of the first $500 of principal and interest plus 10% of the amount over $500.
- Notice is required. After the debt is due, the creditor must notify the debtor in writing that the fee clause will be enforced, and the debtor then "has ten days from the receipt of such notice to pay the principal and interest without the attorney's fees."
- If the formula produces more than $20,000, the debtor can ask the court to decide what's reasonable (except on a default).
- Whether an unsigned invoice counts as an "evidence of indebtedness" is a case-law question. A signed credit application or note that includes the fee clause is far stronger.
Fees for bad faith or stubborn litigiousness
Separately, O.C.G.A. § 13-6-11 lets a jury award litigation expenses, including attorney's fees, when the plaintiff specially pleads for them and the defendant "acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense." It's not automatic; a genuine dispute about what's owed usually defeats it. Don't count on it when pricing a collection.
Terms that make collection easier
- A signed credit application listing the legal entity name, the owners, and a billing address.
- Written payment terms: due date, the interest rate on balances 30+ days past due, and an attorney's fee clause stating a percentage.
- A personal guaranty from the owner when you're extending real credit to a small company. See signing and getting personal guaranties.
- Invoices that reference the job or order, the terms, and the date sent.
- Electronic acceptance is fine if done right. See electronic signatures.
When it's time to collect
Start with a clear demand letter stating the balance, the interest, and the fee clause, which doubles as the § 13-1-11 notice. Claims up to $15,000 (rising to $25,000 for cases filed from January 1, 2027) can go to magistrate court. Keep the deadline in mind: four years on an open account (O.C.G.A. § 9-3-25) and six years on a written contract (§ 9-3-24). Our article on collecting from a customer who won't pay walks through the options.
Georgia rules at a glance
| Item | Rule | Law |
|---|---|---|
| Commercial account due date | When the statement is rendered, unless signed terms say otherwise | O.C.G.A. § 7-4-16 |
| Interest on commercial balances | Up to 1.5% per month on amounts 30+ days past due | O.C.G.A. § 7-4-16 |
| Legal rate with no agreed rate | 7% per year simple interest | O.C.G.A. § 7-4-2 |
| Attorney's fee clause with a percentage | Up to 15% of principal and interest | O.C.G.A. § 13-1-11 |
| "Reasonable fees" clause with no percentage | 15% of first $500 + 10% of the rest | O.C.G.A. § 13-1-11 |
| Notice before enforcing a fee clause | Written notice; 10 days to pay without fees | O.C.G.A. § 13-1-11 |
Frequently Asked Questions
How much interest can a Georgia business charge on a late invoice?
On a commercial account, up to 1.5% per month on the portion that has been due for 30 days or more (O.C.G.A. § 7-4-16). Putting the rate in signed terms and on your invoices makes it much easier to collect.
Can I add attorney's fees to an unpaid account in Georgia?
If a signed note or credit agreement includes an attorney's fee clause, O.C.G.A. § 13-1-11 makes it enforceable up to 15%, but you must first give written notice and 10 days to pay without the fees.
What is Georgia's legal interest rate?
7% per year simple interest when no rate is set by written contract (O.C.G.A. § 7-4-2). Judgments carry a different post-judgment rate.
How long do I have to sue over an unpaid account in Georgia?
Generally four years for an open account or oral agreement (O.C.G.A. § 9-3-25) and six years for a written contract (§ 9-3-24).
Sources
- O.C.G.A. § 7-4-16 (commercial accounts)
- O.C.G.A. § 7-4-2 (legal rate of interest)
- O.C.G.A. § 7-4-15 (interest on liquidated demands)
- O.C.G.A. § 7-4-18 (criminal usury)
- O.C.G.A. § 13-1-11 (attorney's fees on indebtedness)
- O.C.G.A. § 13-6-11 (expenses of litigation)
- O.C.G.A. § 9-3-25 (open account and oral contracts)
This guide is general information about Georgia law as of October 30, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Talk to a lawyer about your situation before you rely on a deadline or rule described here.