Invoice payment terms. How to set them so you get paid on time

Many late payments start long before the due date. If the payment terms were never agreed, or the invoice leaves room for doubt, it is easy for a customer to pay late. A few simple habits make a real difference.

Why payment terms matter now

Small firms are feeling the pressure. In its SME Confidence Tracker published on 5 October 2026, Bibby Financial Services reported that 60% of SMEs said customers are taking longer to pay than a year ago, and 40% said they had cut their customer payment terms to protect their own cash flow.

1. Agree the terms before you start work

Agree in writing when you will be paid before you deliver anything. According to GOV.UK, if you agree a payment date it must usually be within 30 days for public authorities or 60 days for business transactions. You can agree a longer period than 60 days between businesses, but it must be fair to both.

2. Know what applies if nothing was agreed

If no payment date was agreed, GOV.UK says the payment is late 30 days after the customer gets the invoice, or after you deliver the goods or provide the service, if that is later.

3. Put a clear due date on every invoice

Write the actual due date, for example "Due 25 November 2026", as well as the terms. A date is harder to misread than "30 days". GOV.UK also lists what an invoice must include, such as a unique invoice number, your company name and contact details, the customer's company name and address, a clear description of what you are charging for, the supply date, the invoice date and the total owed.

4. Invoice the right company, promptly

Use the customer's full legal name. If they are a limited company or LLP, you can check their registered office on Companies House. Send the invoice as soon as the work is done, to the person who approves payment.

5. Say what happens if payment is late

Under the late payment rules, you may be able to add statutory interest and a fixed compensation sum to a late business invoice. Mentioning this on your invoice sets expectations early. See our guide to late payment interest, or check what you are owed on an overdue invoice for free.

This post is general information, not legal advice about your situation.

If an invoice is already overdue

Clear terms help, but some customers still pay late. Our checklist on what to do first when an invoice is overdue walks through the next steps.

How InvoiceCollect helps

InvoiceCollect chases the debtor company for 4 weeks by email and text on working days, never more than once a day, plus a posted letter to their registered office. Interest and compensation are written into every chase where the legal conditions are met. Your customer pays you directly and there is no commission. We are not a law firm. Start your chase.

Sources: GOV.UK, Late commercial payments; GOV.UK, Invoices: what they must include; Bibby Financial Services, 5 October 2026.