Payment terms tell a customer when and how to pay. For UK sole traders invoicing other businesses, the wording should connect three things: the arrangement agreed before work starts, the event that starts the payment period and the deadline shown on the invoice.
Agree the terms before starting work
Set out your proposed terms in the quotation or contract and get the customer’s agreement. Resolve any differences between those terms and their purchase order before proceeding.
Choose an arrangement that suits the work. A deposit can help cover upfront costs, while staged payments divide a longer project’s fee between agreed milestones. Ask how the customer’s approval process works and whether it can accommodate your proposed deadline. Keep written confirmation.
For business-to-business payments, GOV.UK explains that, without an agreed date, payment generally becomes late 30 days after the customer receives the invoice or you supply the goods or services, whichever happens later.
Make the payment instructions specific
If you prepare invoices in Sole Traders MTD software, check the template’s payment wording against the agreement. Put the amount due and deadline together, followed by the payment method and reference. For bank transfers, include the necessary account details.
Specify what starts the payment period: the invoice date, receipt of the invoice or a defined delivery event. Each can produce a different deadline. State whether the period is measured in calendar days, then give the resulting due date.
Three payment-term wording examples
Payment within a fixed period
“Please pay £600 by bank transfer within 14 calendar days of the invoice date, 8 June. Payment is due on 22 June. Use the invoice number as your payment reference.”
This is a Net 14 arrangement, with the invoice date as its starting point. Calendar days include weekends and bank holidays. Send the invoice on its issue date so the customer has the intended payment window.
Payment before work begins
“The full fee of £240 is payable by bank transfer before work begins. Work will start once payment has been received. Please use the invoice number as your payment reference.”
For a booked start date, agree a payment deadline that allows the work to begin as scheduled. Make clear what happens to the booking if payment arrives late.
A deposit with a later balance
“For the agreed £1,000 fee, £300 is payable before work starts. The remaining £700 is due within seven calendar days of delivery of the agreed final report.”
This defines the balance-payment trigger more precisely than “on completion”. When issuing the balance invoice, show the deposit already paid and the remaining amount due. If delivery is on 10 June, the stated deadline is 17 June.
Check the invoice before sending
Compare the invoice with the accepted quotation and check the arithmetic, due date and payment details. On a balance invoice, confirm that the deposit already paid has been deducted.
Ask for the correct billing email address and any required purchase-order number. The person commissioning the work may be different from the person processing payment, so use the agreed channel.
If the customer queries an amount or delivery date, identify the specific disagreement and respond with the supporting document. Keep the invoice and correspondence together so any later reminder refers to the same agreed amount and deadline.