A due date added after the work is complete can feel like a new condition. Put the key payment terms in the quote, obtain approval, and repeat them on the invoice.
Essential Payment Terms
- Total price and VAT status
- Deposit amount and due date
- Staged-payment milestones
- Final balance trigger and due date
- Accepted payment methods
- Material ownership where relevant
- Variation approval process
- Cancellation and postponement terms
- Late-payment process
- Quote validity period
Example for a Small Job
“Payment is due within seven calendar days of invoice. Additional work will not be undertaken without written customer approval of the price.”
Example for a Larger Project
| Milestone | Example percentage |
|---|---|
| Booking and materials deposit | 20% |
| Completion of first agreed stage | 30% |
| Completion of second agreed stage | 30% |
| Practical completion and handover | 20% |
Percentages must suit the actual cash flow and consumer rules that apply to your work. Avoid taking a disproportionate advance without a legitimate reason.
Variations Must Be Written Down
Describe the requested change, price effect and schedule effect. Obtain written approval before proceeding whenever practical. A casual on-site request can otherwise become a payment dispute.
Invoice Promptly
Send the invoice when the agreed milestone occurs, not several days later. Include the invoice number, issue date, specific due date, work description, amount, payment details and contact information.
Late-Payment Wording
Use professional, proportionate wording and ensure it matches the law and contract applying to the customer. Consumer and business-to-business jobs may require different treatment.
Legal note: This guide provides general business information, not legal advice. Ask a qualified UK professional to review your standard terms.
A Simple Reminder Sequence
- Friendly reminder shortly before or on the due date.
- Clear overdue reminder with invoice details.
- Personal contact to identify any dispute or administrative issue.
- Formal written notice where appropriate.
Deposits: How Much and What They Cover
A deposit protects you from buying materials for a job that never goes ahead. It works best when the quote explains exactly what the deposit is for — usually materials and securing a start date — and what happens to it if the customer cancels. Keep the deposit proportionate to your real upfront costs; asking for a large deposit on a small job can put customers off and look like a warning sign.
Cancellation Rights for Customers
When a contract with a consumer is agreed away from your business premises — for example at the customer's home — the customer usually has a legal right to cancel within 14 days. If they ask you to start within that period, they may still owe you for work already done. Explain this clearly and keep a written record of any request to start early. Rules change, so check the current guidance on GOV.UK if you're unsure how it applies to your jobs.
Staged Payments on Bigger Jobs
For larger projects, tie each payment to a stage the customer can see has been completed:
- Deposit on acceptance, to cover materials and secure the start date
- A stage payment when a clear milestone is reached, such as first fix complete
- A further stage when the main works are complete
- The balance on completion and sign-off
Milestones avoid arguments about whether a payment is "due yet", and keep your cash flow steady on longer jobs.
Payment Methods
Make paying you easy. Put your bank details on every invoice, include the invoice number as the payment reference, and consider offering a card payment link for customers who prefer it. The fewer steps between the invoice and the payment, the faster the money arrives.
Retentions on Commercial Work
On commercial and subcontract work, a main contractor may hold back a small percentage of each payment as a retention until a defects period has passed. If you agree to a retention, make sure the contract states the percentage, when it will be released and what has to happen first, and diary the release date so it doesn't get forgotten.
Put the Same Terms Everywhere
Payment terms only work if they are consistent. Use the same wording on your website, your quote and your invoice, so the customer sees the same deposit, due dates and late-payment terms at every stage. If terms change for a particular job, write the change down and get it agreed before work starts rather than adding it to the final invoice.
Frequently Asked Questions
What payment terms should a tradesman put on a quote?
State the deposit, milestones, final due date, payment method, variations, cancellation, quote validity and late-payment process.
Should tradesmen take a deposit?
A reasonable deposit can cover committed materials and booking risk, but the amount should suit the project and applicable consumer rules.
Should the invoice repeat the quote payment terms?
Yes. The invoice should show the specific amount and due date while remaining consistent with the terms the customer accepted.
Can a customer cancel after accepting a quote?
Often yes. Consumers usually have 14 days to cancel a contract agreed away from your business premises, such as in their own home. If they ask you to start within that period, they may have to pay for work already done. Check the current guidance on GOV.UK for how it applies to your situation.
Should payment terms be different for commercial clients?
Usually. Commercial clients often expect longer terms, such as 30 days, and may apply retentions. Agree the terms in writing before starting, and make sure your invoices match what was agreed.
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