US reader note. This page uses US English but discusses UK tax, VAT, CIS, or payment rules. Treat it as UK-focused educational content, not US legal, tax, or accounting advice. US requirements vary by federal, state, and local rules, so check with a qualified professional before applying anything to a US business.

Why payment terms matter

Payment terms are the rules of when and how you get paid. They are not just admin. They are the difference between healthy cash flow and scrambling to cover materials for the next job while still waiting on money from the last one.

Too many contractors finish a job, send an invoice, and hope for the best. No due date. No deposit taken. No structure. The result is predictable: late payments, awkward conversations, and a bank balance that lurches from one job to the next.

Clear payment terms, agreed before work starts, set the right expectations with your customer. They tell the customer exactly when they need to pay and what happens if they do not. They also protect you if you ever need to chase a debt formally -- courts look favorably on contractors who can show they stated their terms clearly and upfront.

Common payment term options

There is no single correct payment term. The right choice depends on the type of work, the size of the job, and who your customer is. Here are the most common options used by UK contractors:

  • Due on completion -- payment is expected as soon as the job is finished. Common for small domestic jobs like a boiler service, a tap repair, or a single-day task. Simple and effective.
  • 7 days -- gives the customer a short window to arrange payment. Works well for residential customers and small to medium jobs. Gets money in quickly without feeling aggressive.
  • 14 days -- a popular middle ground. Most residential customers are comfortable with two weeks, and it gives you a reasonable turnaround without dragging things out.
  • 30 days -- standard for commercial work, landlords, letting agents, and property management companies. Some larger businesses will not accept anything shorter, so this may be non-negotiable for certain clients.
  • Staged payments -- for larger projects, you split the total into milestones. A deposit upfront, a payment at a midpoint, and the balance on completion. More on this below.

For most contractors doing domestic work, 7 or 14 days is the sweet spot. It is short enough to keep your cash flow moving without putting unreasonable pressure on the customer.

Taking deposits: when and how much

A deposit is a partial payment taken before work begins. It serves two purposes: it covers your upfront costs for materials, and it confirms the customer is serious about the job.

When should you take a deposit? As a general rule, consider a deposit for any job where you need to purchase materials in advance or where the total value is high enough that non-payment would hurt. That usually means jobs over a few hundred pounds.

How much should you charge? The standard range is 10 to 30 percent of the total job value. The exact amount depends on several factors:

  • 10 percent -- reasonable for jobs where material costs are low relative to labor. It shows commitment without asking for too much upfront.
  • 20 percent -- a common middle ground. Covers most material purchases and gives you a meaningful buffer.
  • 30 percent -- appropriate for larger projects with significant material costs, or when working with a new customer you have no history with.

Be upfront about the deposit when you quote. Do not surprise the customer with it after they have agreed to the price. Include it in your quote or estimate so it is part of the conversation from the start.

Tip. Always give the customer a receipt or confirmation when they pay a deposit. A simple message or email confirming the amount received and what it is for is enough. This protects both of you if there is ever a disagreement.

Staged payments for bigger projects

For larger jobs -- a kitchen fit-out, a full bathroom renovation, a loft conversion, a roofing project -- a single invoice at the end is risky. You could be weeks or months into a project before seeing any money beyond the deposit. Staged payments solve this.

A common staged payment structure looks like this:

  • 30 percent deposit -- paid before work begins. Covers initial materials and confirms the booking.
  • 40 percent at midpoint -- paid when the project reaches an agreed milestone. For example, first fix complete, or structural work finished.
  • 30 percent on completion -- paid when the customer is happy with the finished work.

You can adjust the percentages to suit the project. Some contractors prefer a 25/25/25/25 split across four stages. Others do 50 percent upfront and 50 percent on completion. The key is to agree the milestones and amounts in writing before work starts.

Staged payments keep your cash flow healthy throughout the project and reduce your exposure if something goes wrong. They also give the customer confidence that payments are tied to progress, not just dates on a calendar.

Domestic vs commercial clients: different expectations

Domestic and commercial customers have very different habits and expectations around payment. Understanding this will save you frustration.

Domestic customers (homeowners, tenants, private landlords) are usually straightforward. Most are happy to pay on completion or within 7 to 14 days. They pay by bank transfer or ACH, and the decision-maker is usually the person standing in front of you. If you set clear terms and send the invoice promptly, most residential customers pay without fuss.

Commercial customers (businesses, property management companies, letting agents, housing associations, contractors) are a different story. Many operate on 30-day terms as standard. Some will push for 60 or even 90 days. They may have formal purchase order processes, require you to submit invoices to a specific email address, and have accounts departments that only process payments on certain dates.

For commercial work, agree the payment terms before you accept the job. Ask how long they typically take to pay, whether they need a purchase order number on the invoice, and who to contact if a payment is late. If they want 60 or 90 day terms, factor the cost of that wait into your pricing.

How to word payment terms on your invoice

Your payment terms should be clear, specific, and impossible to misinterpret. Vague wording like "payment expected promptly" or "please pay soon" gives the customer an excuse to delay.

Here are examples of clear payment term wording:

  • "Payment due within 14 days of invoice date." -- Simple, direct, and leaves no room for confusion.
  • "Due on receipt." -- Means payment is expected as soon as the customer receives the invoice. Good for small jobs.
  • "Net 30." -- The full amount is due within 30 days. Common on commercial invoices.
  • "50% deposit required before work commences. Balance due within 7 days of completion." -- Clear staged terms for a larger job.

Put your payment terms in a visible spot on the invoice -- not buried in small print at the bottom. If the customer agreed to specific terms when they accepted your quote, reference that agreement on the invoice.

What "net 30" and other terminology means

If you work with commercial clients, you will come across payment terminology that can be confusing at first. Here is what the common terms mean:

  • Net 7 / Net 14 / Net 30 -- the full (net) amount is due within 7, 14, or 30 days of the invoice date. "Net" simply means the total with no discount applied.
  • Due on receipt -- payment is expected immediately upon receiving the invoice. In practice, this usually means within a day or two.
  • EOM (End of Month) -- payment is due at the end of the month in which the invoice is received. If you invoice on the 5th, payment is due by the 31st.
  • Net 30 EOM -- payment is due 30 days after the end of the month in which the invoice was issued. So an invoice dated 10 March would be due by 30 April.
  • COD (Cash on Delivery) -- payment is due when the work is delivered or completed. More common in product sales than services, but some contractors use it.

For most contractors doing domestic work, you do not need to use any of this terminology. Plain English works fine. But if a commercial client uses these terms, you now know what they mean.

Dealing with clients who want to extend terms

It will happen. A customer agrees to 14-day terms, then asks for 30. A commercial client says they can only do 60 days. A homeowner asks if they can pay in installments over three months after the job is done.

Here is how to handle it:

  • Do not agree on the spot. Take a moment to think about whether the extended terms work for your cash flow. It is perfectly reasonable to say you need to check and come back to them.
  • Understand the impact. If a 5,000 pound job goes from 14-day terms to 60-day terms, that is an extra six weeks where you are funding materials and labor out of your own pocket. Can your cash flow absorb that?
  • Negotiate, do not just accept. If a client wants longer terms, you can ask for a larger deposit upfront. Or you can add a small percentage to the price to cover the cost of waiting. Both are reasonable.
  • Get it in writing. If you agree to different terms, confirm them in writing -- even a WhatsApp message or email. This protects you if there is a dispute later.
  • Know when to walk away. Some clients use extended payment terms as a strategy to manage their own cash flow at your expense. If a client consistently pushes for longer terms and then still pays late, they are not worth the hassle.
UK note. Under the UK Late Payment of Commercial Debts (Interest) Act 1998, qualifying businesses may charge interest on late payments from business clients. The statutory rate is 8 percent plus the Bank of England base rate. You can also claim a fixed amount for debt recovery costs. This applies to business-to-business transactions, not residential customers.

How WOPA enforces your payment terms

Setting clear payment terms is one thing. Enforcing them is another. That is where most contractors fall down. You set 14-day terms, but then day 14 passes and you forget to chase. Or you feel awkward sending a reminder. Or you are on another job and it slips your mind.

WOPA handles this for you. When you create an invoice through WhatsApp, you set your payment terms -- 7 days, 14 days, 30 days, or whatever suits the job. WOPA then tracks the due date and sends automatic reminders to your customer at 7, 14, and 28 days past due.

The reminders are polite, professional, and consistent. They reference the invoice number, the amount, and the original due date. Your customer sees a well-worded reminder rather than a frustrated text message sent at 9pm after a long day on site.

When the customer pays, you tell WOPA and the reminders stop immediately. No more chasing. No more spreadsheets tracking who owes what. No more wondering whether you sent that follow-up or not.

You set the terms. WOPA makes sure they are respected.

Join the waitlist to get US beta access when WOPA launches.