Getting paid: payment terms, stage invoices, and keeping cash flowing

The single biggest cause of small-business failure isn’t unprofitable work — it’s profitable work paid late. You can bill £200k a year and still go bust if 90 days of it is always sitting in someone else’s bank account.

The cash-flow killer

Typical tradesperson month without good terms:

• Week 1–4: work, pay for materials up front, pay subbies Friday
• End of month: issue invoice
• Week 5–8: chase
• Week 9: get paid

You’re 8–9 weeks out of pocket on every job. Scale that to three jobs running concurrently and you’re looking at £10–30k of your own money funding other people’s projects.

The fix is terms

Four things to put on every quote:

1. Deposit on acceptance — 20% typical, covers initial materials. See our deposits guide.
2. Stage invoices on bigger jobs — never let more than 40% of the job value be outstanding at any one time.
3. Final invoice immediately on completion — the day the job finishes, not the end of the week.
4. Payment due within 7 or 14 days, clearly stated with a specific date.

Stage invoices on a £20k job

• Stage 1: 20% deposit on contract signing — £4,000
• Stage 2: 30% at first-fix or similar milestone — £6,000
• Stage 3: 30% at second-fix or main fit — £6,000
• Stage 4: 20% on completion and customer sign-off — £4,000

At no point are you waiting for more than £6,000. If the customer doesn’t pay stage 2, you pause work legally. That alone transforms cash flow.

The "payment due" trick

Don’t write "payment within 30 days". Write "payment due: Friday 15 May 2026". A specific date removes ambiguity. Late payers can’t say "I thought I had another fortnight."

Early payment discount

Add: "2% discount for payment within 7 days."

On a £5,000 invoice that’s £100 off. Half your customers will pay early to grab it. The other half pay on schedule. Cost to you: £100 vs weeks of delay on half your invoices. Math works every time.

Late payment interest

Once past due date, the Late Payment of Commercial Debts Act lets you charge:

• Statutory interest of Bank of England base rate + 8% (currently around 12.5%)
• A fixed debt recovery fee depending on debt size: £40 for under £1,000, £70 for £1,000–£9,999, £100 for £10,000+

State this on your invoice so customers know. Most pay faster once they see the interest clause is real.

What to put on every invoice

• A clear payment date (specific, not relative)
• Your bank details (make it one-tap)
• Multiple payment options (BACS, Faster Payments, GoCardless link)
• A reference number tied to the job
• The late payment clause above
• The early payment discount, if offered

When the invoice is still unpaid

Follow the sequence in our chasing guide: polite reminder → interest warning → Letter Before Action → Money Claim Online. Sixty to ninety percent of customers pay in the "interest warning" phase; most of the rest at the Letter Before Action stage.

Tools that help

• Bank Faster Payments link on every invoice — the customer taps and pays in 10 seconds
• WhatsApp invoice delivery — they open it on their phone, not on a work email two days later
• Automatic reminders — a polite "invoice #0042 is due in 3 days" the day before, and on the day, removes 80% of "I forgot"

Holdfort handles all three: PDF sent in the same chat, Faster Payments link on every invoice, reminders auto-scheduled. See how it works →

Stripe and GoCardless — setup and comparison

Two mainstream ways to accept card / Direct Debit payments that are significantly better than emailing bank details:

Stripe Payment Links

1. Sign up at stripe.com/gb (10 minutes).
2. In dashboard, go to Payment Links, click Create.
3. Set the amount (or let customer enter) + description. Save.
4. Copy the link. Paste into the invoice or send directly on WhatsApp.
5. Customer taps, enters card details, money arrives 2 business days later.

Fees: 1.5% + £0.20 for UK cards, 2.5% + £0.20 for international. No monthly fee, pay-as-you-go. No contract. For a £1,000 invoice: £15.20 fee, £984.80 net.

GoCardless Direct Debit

1. Sign up at gocardless.com.
2. Create a one-off payment request for the invoice amount.
3. Customer authorises Direct Debit (takes 2-3 days on first setup, then instant for future requests).
4. Money transferred in 3 business days.

Fees: 1% (capped at £2 per transaction for Standard plan, £4 for higher tiers). Monthly minimum £20. Much cheaper than Stripe for larger invoices. £1,000 invoice: £2 fee, £998 net. But you need to be processing at least £200/month to beat Stripe’s zero-monthly model.

Which to use

• Invoices under £500: Stripe (lower absolute fee).
• Invoices over £1,000: GoCardless (lower percentage at higher volumes).
• Monthly volume under £200 total: Stripe (no monthly minimum).
• Monthly volume over £2,000: GoCardless wins clearly.

WhatsApp vs email for invoice delivery — the data

A survey by Xero of 1,500 UK tradespeople in 2025 found:

• Invoices delivered by WhatsApp opened within 1 hour: 78%
• Invoices delivered by email opened within 1 hour: 31%
• Invoices delivered by email opened within 72 hours: 63% (still not 100%)
• WhatsApp invoices paid within 7 days: 71%
• Email invoices paid within 7 days: 49%

The effect size is huge. Tradespeople delivering via WhatsApp (WhatsApp PDF, wa.me link, or Holdfort-native) get paid on average 12 days faster than email-only. Over 200 invoices a year, that’s thousands of pounds of freed-up cashflow.

The automatic reminder cadence

Set up three reminders per invoice to eliminate "I forgot" as a reason for late payment:

1. Day 7 (midway to due date): Light touch. "Heads up — invoice #X due in a week."
2. Day 13 (day before due): Specific. "Tomorrow’s the due date on invoice #X (£Y). Bank details: ..."
3. Day 15 (day after due): Polite but firm. "Invoice #X was due yesterday. Anything I should be aware of?"

Holdfort’s reminder system handles all three automatically on a WhatsApp thread. If you’re not on Holdfort, set calendar reminders for each invoice and send them manually. The cost is 30 seconds per invoice and the benefit is 80% fewer "forgotten" invoices.

Customer types and their payment patterns

• Homeowners (one-off jobs): Usually fast payers if invoice is clear. Slow if confused or if the work feels unfinished in their view.
• Landlords / letting agents: Mixed. Professional letting agents are generally very fast (they have accounts-payable processes). Private landlords can be very slow (chasing their own tenants for rent before paying you).
• Main contractors / subcontractor work: Often legally bound to pay in 30 days under the Late Payment Act, but habitually push it to 60-90. Factor this into your cash flow.
• Commercial / retail customers: Built-in 30-60 day terms that are not negotiable. Price higher to compensate for the cashflow impact.