What payment terms are
Payment terms are what you and the customer agree about paying: when, how much at each point, and how. Agree them before the job, on the quote, and repeat them on the invoice. If they're only on the invoice, the customer saw them for the first time after the work was done.
Good terms answer four questions:
- When is it due? On the day, or a set number of days after the invoice.
- Is it all at once? Or a deposit, stage payments and a balance.
- How can they pay? Card or Apple Pay, bank transfer with a reference, cash.
- What happens if it's late? Only promise what you'd actually do.
Common terms, and when they fit
| Terms | Suits | Watch out for |
|---|---|---|
| Payment on completion | Householders, call-outs, small jobs, regular visits | Say it on the quote, and give them a way to pay there and then |
| 7 or 14 days | Householders who'd rather pay by bank transfer, repeat customers | Write the date, not just "14 days", so there's no doubt when it's late |
| 30 days | Letting agents, landlords' companies, contractors, shops | Budget for waiting a month, plus the time it takes to chase |
| Deposit, then the balance | Jobs where you buy materials first | The homeowner's 14 days to cancel; see the deposit guide |
| Stage payments | Jobs over several weeks | Tie each payment to something you can both see is done, like "first fix finished" |
There's no single right answer. The shorter the gap between finishing and being paid, the less chasing you do and the less you're lending your customers.
The rules for business customers
When the customer is another business, such as a letting agent, a contractor, a landlord's company or a council, the late payment law sets some limits. GOV.UK says:
- If you don't agree a payment date, payment is late 30 days after the customer gets your invoice, or after you do the work if that's later.
- An agreed payment date must usually be within 60 days for business customers, and 30 days for public authorities. Longer than 60 days is allowed only if it's fair to both businesses.
- Once it's late, you can claim statutory interest at 8% above the Bank of England base rate, plus a fixed £40, £70 or £100 depending on the size of the debt, unless your contract sets a different rate.
The late payment interest calculator works out the figure. Source: GOV.UK, late commercial payments: charging interest and debt recovery.
Householders
The statutory interest and fixed sums are for business customers only. With a householder, what you agreed is what counts, which is why the quote matters: put the terms on it in plain words before they say yes. You can only add interest or a late fee to a householder's bill if your terms said so before the job, and those terms have to be fair.
Most householders expect to pay when the job's done. Make it easy: an invoice in their hand or on their phone as you pack up, with a way to pay that takes a minute.
Wording you can copy
For a small job or a call-out, on the quote:
Payment is due on completion, by card, Apple Pay or bank transfer. I'll send the invoice when the job's done.
For a householder paying by transfer, on the invoice:
Payment due by 12 November 2026 (14 days). Bank transfer to [account name], sort code [00-00-00], account [00000000], reference [invoice number]. Or pay by card with the link.
For a business customer, on the quote and the invoice:
Payment terms: 30 days from the date of invoice. Late payments may be charged interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.
For a bigger job:
Deposit of £600 to book the start date and order materials. £1,000 when the first fix is finished. The balance of £650 on completion.
The dates and figures are made up; use your own. The free quote template and invoice template have room for terms like these.
Getting paid on the terms you set
- Send the invoice the same day. A 14-day term doesn't start until they have it.
- Put the due date and a way to pay on every invoice. A bank transfer needs your details and a reference; a card needs a link.
- Remind them the day after it's due, not a month later. The chasing guide has messages to copy.
- Keep to your own terms. If you never chase, customers learn that the date doesn't mean much.
Paid on the day with Knockround
In Knockround, the invoice is ready the moment the job's done. Send it on WhatsApp with a Pay button, or show the QR code on your phone at the door, and the customer pays by Apple Pay, Google Pay or card there and then, straight into your own Stripe account. Every invoice shows what's paid and what's still owed, so you know who to remind.
Try it on the plumbing demo, with made-up customers. It's free for 7 days with no card needed, then £19.99 a month.
Written by the Knockround team from GOV.UK, late commercial payments and invoicing and taking payment from customers, read on 29 October 2026. This is a guide, not legal advice.