Updated September 2026 · 8 min read · Mike Tasset, Trame founder

How to write payment terms that actually get you paid

Payment terms are the cheapest tool you have for getting paid on time, as long as they are clear, on the quote, and not buried in PDF small print. Here are the four clauses to include.

1. Deposit

A deposit gets money in the door before you start. It also tests the customer: if they will not pay a deposit, think carefully before you start the job.

What to ask for depends on the job size. On jobs over a few hundred pounds, you might ask for 25 to 50 percent upfront, with the rest split into milestones or paid on completion. For materials-heavy work, you can ask for the materials cost upfront and labour on completion. If a homeowner cancels, you may not be able to keep all of the deposit. See the cancellation question at the end of this guide.

Sample wording:

A deposit of 30% is payable on acceptance of this quote. Work will be scheduled once the deposit has been received.

Common mistake: agreeing to start work "and we'll sort the deposit next week." Once you're on site, the leverage to chase it has gone.

2. Payment timeframe

The clause that tells the customer when they have to pay you, in writing, before the work starts.

Pick 7, 14, or 30 days from the invoice date. Shorter is better if you can get it. For consumer work (a homeowner), 7 days is reasonable. For commercial customers (a builder, a landlord, a letting agent), you may need to agree 14 to 30 days, but you can negotiate.

Sample wording:

Payment is due within 14 days of the invoice date. Invoices not paid within this period are subject to the late payment clause below.

Common mistake: not specifying a timeframe at all. Without an agreed deadline, the law steps in and sets one for you: 30 days from delivery or notice of the debt for business customers, whichever is later.

3. Late payment interest

UK law already gives you the right to charge interest on late invoices to business customers. Having the clause in writing on the quote makes it harder for a customer to argue when you do invoke it.

For business customers, the law is on your side. The Late Payment of Commercial Debts (Interest) Act 1998 gives you the right to charge statutory interest at 8% above the Bank of England base rate. On top of that, you can claim a fixed compensation fee for each late invoice. The fee depends on the size of the debt: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.

If your terms set a different late payment rate for a business customer, that rate applies instead of statutory interest, and the fixed sum does not apply either. So for business customers, use the business wording below, not the homeowner wording.

For consumer customers (someone hiring you for work on their own home, for example) there is no statutory right to interest. You can charge interest only if the rate was set out in your terms and the customer agreed to it before the work started. Keep the rate reasonable. Government guidance on unfair terms says a rate set well above bank base rates is likely to be unfair, and an unfair term is not binding on a homeowner at all. A court does not reduce it to a fair rate, so you lose the interest completely.

Sample wording (business customers):

Late payment will accrue interest at 8% above the Bank of England base rate, plus statutory compensation, in line with the Late Payment of Commercial Debts (Interest) Act 1998.

Sample wording (consumer customers):

Invoices unpaid after the due date will accrue simple interest at [X]% a year above the Bank of England base rate, calculated daily until paid.

Take advice on the rate before you put it in your terms.

For the full process of when and how to invoke these clauses if an invoice does go unpaid, see what to do when an invoice goes unpaid.

Common mistake: charging interest you never put in writing. For a homeowner, you cannot charge it at all. For a business customer, the statutory right applies even if your terms do not mention it, as long as they do not set a different rate, but putting it on the quote makes the conversation much easier.

It is also worth knowing that the rules around late payment look set to tighten. The Small Business Protections Bill, introduced to Parliament in May 2026, would cap payment terms at 60 days when large firms pay smaller suppliers, and make interest on late payments at 8% above base rate mandatory in business contracts. It is not law yet, but it shows where things are heading.

4. Stop-work clause

A short clause that says you can pause the job if an invoice goes unpaid. Useful on bigger jobs with staged payments, where a customer can otherwise let an interim invoice slide while you keep working.

Sample wording:

[Your business name] reserves the right to suspend work on this project if any invoice remains unpaid 7 days after its due date. Work will resume once the outstanding balance has been settled.

Common mistake: not using it. Once you have suspended work once or twice, customers learn that you are serious about deadlines.

Where the clauses need to live

A clause is only useful if you can show the customer agreed to it. The strongest position is terms on the quote itself, visible, and signed or digitally accepted before the work starts. Separately linked T&Cs can also work if the customer was clearly directed to them before accepting, but they are weaker. Verbal terms or terms buried in long emails are weaker still.

The reason is simple. The contract between you and the customer is formed when they agree to the quote. Terms introduced for the first time on an invoice, after the work has been done, are not part of that contract. You can still send them, but if the customer pushes back, the court will look at what was agreed at the start, not what was added at the end.

There is one exception worth knowing about. If you have a long-running relationship with a customer and have consistently used the same terms on every invoice over many jobs, courts may treat those terms as agreed by habit. Do not rely on this, especially with a homeowner. For every new customer, the safe answer is the same: the terms have to be on the quote, before the work starts.

If a dispute ever comes up, the first question anyone will ask is: how do you prove the customer agreed to these terms? The cleaner the answer, the better your position.

Before you send the next quote, check

Deposit amount and timing are stated
Payment timeframe is stated (7, 14, or 30 days)
Late payment interest clause is included
Stop-work clause is included for staged jobs
The terms are clearly visible and the customer can demonstrably agree to them

Trame shows the deposit and payment timeframe on every quote, with the agreed timeframe carrying through to the final invoice.

Frequently asked questions

Do I need a separate contract, or are payment terms on the quote enough?

For most trade jobs, terms on the quote are enough, provided the customer accepts the quote in writing before the work starts. A separate contract is worth having for larger jobs, longer projects, or anywhere scope is likely to shift. The key is not the format, it is whether you can prove the customer agreed to the terms before the work started.

Can I change my payment terms partway through a job?

Only if the customer agrees. Get that agreement in writing, because a verbal change is hard to prove. The terms are set when the quote is accepted, and changing them mid-job needs the customer's agreement too. If costs have risen or scope has expanded, the cleaner path is to issue a revised quote covering the new work and have the customer accept it separately.

What happens if the customer signs the quote but adds their own terms?

This is the "battle of the forms" problem. If a customer accepts your quote but writes back with their own conditions attached, the contract is not yet formed. The terms that apply are whichever set was the last to be agreed to without further changes. The safe response is to address any new conditions before the work starts, not to assume your original terms still apply. If you start work without settling it, you may be treated as having accepted their terms.

Do payment terms still apply if the customer cancels the job?

Partly. If you agreed the job with a homeowner in their home, or by phone, email or online, they can usually cancel within 14 days for any reason under the Consumer Contracts Regulations 2013. You then have to refund what they paid within 14 days, less a fair amount for any work they asked you to start early. Get that request in writing, or you may not be able to charge for the work. If you did not tell them about the right to cancel, the cancellation period can run for up to 12 months longer. Outside that period your cancellation terms apply, for example that work done up to the cancellation date is invoiced. A homeowner can only lose a deposit that is a small part of the price, or that covers costs you cannot get back, such as materials ordered specially for their job (government guidance on unfair terms). The 14-day right does not apply to business customers. The rules have exceptions, so take advice if a large sum is at stake.