Should You Get Paid on Completion or on Invoice Terms?
For most residential jobs, getting paid on the day the work is completed is the safest option and avoids chasing money later. Invoice terms like net 14 or net 30 are more common with commercial clients, landlords, and letting agents, who often have their own internal payment processes that don't allow same-day payment even if they wanted to.
Why Do Longer Payment Terms Create Risk for Small Trades Businesses?
You've already paid for materials and your own time by the time you invoice, so a 30-day wait for payment means you're effectively financing the client's cash flow with your own. For a small or solo trades business, several jobs on long payment terms at once can create a real cash flow squeeze even if the business is profitable on paper.
How Do You Handle Commercial Clients Who Insist on 30-Day Terms?
If you can't avoid longer terms, price the job to account for the delay, and consider requesting a deposit upfront to cover materials regardless of the final payment terms. This way, even if the balance takes 30 days, you're not out of pocket for the cost of goods you had to buy immediately.
What Should Your Invoice Actually Say About Late Payment?
Include your payment terms clearly on every invoice, along with a stated late payment policy, even if you rarely enforce it. Simply having it in writing changes the conversation if a payment does run late, and UK law actually allows small businesses to charge statutory interest on overdue commercial invoices if it comes to that.
Frequently Asked Questions
What payment terms should I use for private homeowners?
Payment on completion is the standard and safest approach for private homeowner jobs, since there's rarely a legitimate reason for a homeowner to need extended terms.
Can I charge interest on late payments in the UK?
Yes, UK law allows small businesses to charge statutory interest and compensation on overdue commercial invoices, though it's rarely used for residential customers where the relationship matters more.
How do I politely chase a late invoice?
Send a short, friendly reminder shortly after the due date, then a firmer follow-up if it's still unpaid a week or two later. Keep records of every message in case you need to escalate.