Invoice payment terms and how to word them
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Payment terms tell the customer when to pay, what starts the clock, how to pay and which reference to use. Agree them before you start. Then put the same terms on the invoice, rather than springing a new condition on the customer at the end.
When does the clock start?
"14 days" means nothing until you say 14 days from what. The invoice date? When they get it? When you finish, or after a stage? Put the actual date on the invoice as well as the rule, so nobody has to count on their fingers.
With a business customer, ask about purchase orders and how their accounts team pays before you start. With a homeowner, make the total and any up-front payment plain. The two are treated differently in law, and commercial late-payment rules aren't reminder fees you can add to a household bill.
Clear 14-day wording
Invoice EX-0042 is issued on 3 November 2026 for £480. The terms say: “Payment is due within 14 days of the invoice date, by 17 November 2026. Please pay by bank transfer using EX-0042 as your reference.”
Fourteen days is what this business agreed with its customer. It isn't a legal default. The invoice gives the account name, sort code and account number, plus a number to ring with questions. It repeats what the customer agreed to before the work began.
What to put in your terms
- The due date, and what any day count runs from.
- How to pay and which reference to use.
- Any deposit or stage payments, with amounts and when they're due. "Balance later" isn't enough.
- How to raise a query quickly. Don't claim a query takes away anyone's rights.
- Who to contact about payment, and a written note of any change you agree.
Late payment between businesses
GOV.UK says agreed payment dates are usually within 30 days for public authorities and 60 days for business-to-business work. Longer terms have to be fair to both sides. If no date was agreed, payment is late 30 days after the customer got the invoice or the work was done, whichever is later.
For a qualifying commercial debt, statutory interest is 8% plus the Bank of England base rate, unless your contract sets its own interest. Look up the current base rate when you need it rather than copying an old one onto every invoice. The fixed recovery sums depend on the size of the debt, and they aren't a charge for each reminder.
Homeowners, and changing the terms
Don't add business late-payment interest or recovery fees to a homeowner's bill just because they're late. Terms with consumers have to be fair, and any extra charge needs a proper basis in the contract and the law. If it's unusual or disputed, get advice rather than borrowing the business rules.
If a customer asks for longer, agree the new date in writing. Keep the original invoice and a note of what changed. For a payment plan, write down each instalment, when it's due and what's still owed, so you don't end up billing the same money twice.
Say the same thing everywhere
Your quote, any confirmation, the invoice and the reminder should all say the same thing. In Bojit, your payment terms setting sets the invoice due date. It doesn't agree terms with the customer or collect the money for you. Bojit sends one invoice for the full amount, so keep track of any deposit or stage payments yourself.
Before you send, check the address, invoice number, amount and bank details. Save what you sent. If it goes overdue, start by checking they got it and asking if anything's wrong, before you think about anything formal.
Sources
- GOV.UK: late commercial payments
- GOV.UK: charging commercial late-payment interest
- GOV.UK: commercial debt recovery costs
- CMA: cancelling goods or services
General guidance for UK tradespeople, not legal or tax advice. The examples use made-up businesses and prices.
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