January 23, 2023

How to take payments for your trades business

Card paying contactless on card reader

With most products and services the payment process is simple: the job is completed or the product is taken and the customer pops in their card and pays the money.

Sometimes a customer might pay before the service - if they’re engaging in an experience or booking a flight for example - but either way, the process is painless.

Unfortunately, when it comes to paying tradespeople, things aren’t so straightforward, not for the customer or the business owner.

So why are things so complicated?

As is often the case, there are a number of causes for this complexity.

1. Dealing with large sums of money

Due to the fact that tradespeople usually work on large projects that involve considerable expenses, these costs can’t always be paid in the usual way.

Sometimes the customer might require finance to manage the cost of the work or the tradesperson may want to break the price down into chunks, so they can ensure they get paid across the duration of the project.

This adds extra steps and increased complexity to the payment process.

2. Changes to the final outcome from the original plan

This is a common occurrence when a tradesperson works on a building project. Customers often request changes and additions as the project progresses. This affects the final price and how payments are recorded and taken.

This is a topic we cover in detail in our blog on change orders and multiple invoices, providing some solutions to deal with these new requests.

3. VAT vs non-VAT businesses

One common payment issue is that customers can be funny about paying VAT. Depending on the size of the business a tradesperson may or may not have to charge VAT.

In the cases where VAT needs to be charged, customers sometimes try to get around the tax by paying in cash. Although this isn’t strictly legal, sometimes it can be difficult to avoid, once again making the payment process more complicated.

For more information on how VAT works and why some businesses have to pay it and others don’t read our blog on how to price a job.

4. Customer expectations

A big part of the problem surrounding taking payments is that there isn’t a unified, set way of doing things. This means that customer expectations can vary significantly.

With differing expectations comes confusion and difficulty, for the customer and the business owner.

So what can trade businesses do to address these issues? The answer… give the customers options and adopt different solutions for different cases.

Taking payments for your trade business

In 2023 it can be difficult to know which payment methods you should offer your customers and how you should implement these payment options for your trade business.

To help you out, we’ve outlined some of the major payment methods available to you and how they can be used to help your business

How many types of payment methods are there?

There are 4 core types of payment methods, cash, card, cheque and bank transfer. These categories can be separated into further subcategories of payment method such as credit and debit card payments, mobile payments and wire transfers.

Card payments

This is the form of payment people are probably most familiar with. Cards are used every day to pay for small items and make large purchases. Often payments are made using contactless payment, however, this isn’t possible when paying for a large purchase.

So should trade businesses be able to take cards and if so, how can you integrate this form of payment into your business?

How to start taking card payments

If you want to take card payments as a trade business, there are essentially two ways of going about it. Either you can take payments in person with a physical card reader or you can take payment via a website or payment link.

Typically tradespeople tend not to take in-person payments by card as these involve purchasing a card reader and paying a percentage fee on every transaction. Particularly for large payments, this can equate to a significant amount of money. Usually, a bank transfer would be the preferred option

Paying with credit card in card machine

Online card payments, on the other hand, are easy to integrate.

In the modern market, customers are used to processing transactions online and for those trade businesses that can take this form of payment, they are able to separate themselves from the competition.

Setting up this payment method is also a straightforward process. By using CRM software, businesses can digitalise the whole payment process. For example, plumbers who use Payaca have access to stripe and BACS payments.

Payaca users can design an invoice, send it to the customer and allow that customer to pay directly from the invoice.

It’s even possible to combine online payment with in-person payment by using QR codes - something we will look at later in this blog.


Although used less and less, cash payment is still often the preferred method when taking payments.

Some of the benefits of taking cash payments include:

  • Security
  • Payment accountability
  • No additional transactional charges

When taking payment in cash you can physically receive the money from the customer. Receiving physical currency guarantees that you have been paid as you are literally given the money as raw notes and coins, it’s far harder to get scammed or lose the money during a transaction. Of course, this isn’t always practical for large sums of money, but for small transactions, it can be an appealing option.

Furthermore, customers are forced to be more accountable with cash payments. The money can be shown upfront and easily taken onsite. It’s far harder for a customer to make excuses and claim issues with the transaction process.

Lastly, with cash payments, there are no additional transactional charges that are associated with taking digital payments. Transferring money from client to business has no additional costs.

VAT tax avoidance

Some tradespeople take cash as a method to avoid paying VAT and income tax, allowing them to charge less on any given job. This is illegal but often occurs due to competition from small non-VAT paying businesses that are not required to pay this tax. We cover how this works in detail (including the threshold for paying VAT) in our blog on pricing a job.

It’s also important to be aware that often the customer is culpable in the process, putting pressure on businesses to accept cash payments as a way of paying less.

There are also perfectly legal reasons a plumber or other tradesperson might ask for cash, such as those mentioned above.

Cash in wallet


Before bank transfers became available, this was the most common way to pay for expensive work. Today, most people use cheques less often, however, a cheque is still an accepted method of payment and may even be preferable in some instances, particularly if a person is not familiar with bank transfers.

Furthermore, a cheque can be a more secure form of payment as a cheque has to be signed and written out to a specific account. Physically handing a person a cheque can help to avoid fraud or other online scams.

Cheques also provide a physical paper trail which can help when keeping a record of transactions and proof of payments.

In summary, some of the benefits of paying by cheque include:

  • Non-digital payment
  • Payment Security
  • A paper trail is provided

Bank transfer

This is perhaps the most standard form of payment method. Money can be sent directly and instantly to the necessary account. What’s more, if payment needs to be sent in stages, a standing order can be set up, meaning the required money is sent out automatically on the correct date.

Benefits of bank transfer include:

  • Payment sent and received instantly
  • Can be used to automatically send repeat payments
  • Large payments can be sent

Is it safe for tradespeople to use bank transfers?

Paying a tradesperson by bank transfer is safe and secure, however, you should always be careful when sending and receiving bank details. Some scammers have successfully created false invoices by intercepting emails and have stolen large sums of money.

A great solution tradespeople can use is to use a CRM like Payaca. Bank details are securely stored and passed to the customer via the platform. Plus the software is designed to be recognisable so that the customer can be sure any invoice is legitimate.

On-site payments

One issue tradespeople and their customers sometimes come across occurs while out in the field.

It can be difficult to take payments when away from the office, but having the ability to generate an invoice and take payment there and then can be incredibly valuable.

To address this problem, Payaca have introduced a digital payment method that allows a tradesperson to quickly scan a customer's card with their phone camera and process the customer’s payment details in much less time. This makes completing transactions far quicker and more efficient.

Furthermore, with Payaca, a tradesperson can build quotes and generate invoices very quickly directly from their phone. So if a plumber is out on a job and needs to take a deposit or process a payment they can do it right away.

How to chase payments

Unfortunately, the reality of working in the service industry is that sometimes customers are slow to pay or may even try to withhold payments totally. This isn’t a pleasant situation to be in, however, there are some steps a tradesperson can take to try and receive their payment.

How do you remind someone to pay you professionally?

The most effective and professional way to remind a customer to pay is to use automated payment reminders via job management software. With software such as Payaca, you can set automated reminder messages that nudge your customer and let them know that payment is due. These are automatically sent at set intervals from when the invoice is received.

How do I make sure my clients pay on time?

By using automated payment reminders and integrated payment methods you make it easy for your clients to pay on time. Often customers can lose track of payment deadlines. By sending professional reminders and providing an interface that makes payment simple and easy to complete, customers are far more likely to pay on time.

What to do if a customer doesn’t pay when you’re self-employed?

If you’re self-employed and a customer doesn’t pay you should attempt to retrieve the payment in escalated steps:

  • Firstly try follow-up messages to remind the customer to pay
  • If this doesn’t work consider offering a discount. It’s often better to lose some money and keep the customer happy than risk losing all the money and receiving bad press.
  • If this still doesn’t work, see if you can find any of the customer's employment details and attempt to contact their employer, this can be a good way to push a person to pay
  • If the customer still won’t pay, consider threatening legal action and/or a negative press release. Warning the customer that you will publicly out them on social media can force them to be accountable
  • Before you go to court, we would recommend contacting a lawyer to help you. Often this ends up being less expensive and can be a very effective method of reclaiming at least some of your money.
  • If this still fails and the sum is large enough, you can take the dispute to the small claims court. Find out how to complete this process on the UK Gov website.