Vague payment terms are why installers wait 60 days for money they earned in a day. Here's how to set terms that hold up, what you can charge for late payment, and how to make getting paid the default.
Felix Rusby
Put your payment terms on every quote, automatically
Payment terms only work if they're on the document the customer signs, every time. Book a 20-minute demo to see how Payaca attaches your terms, takes the deposit up front, and chases the balance for you.
You can be brilliant at the install and still run out of cash. The difference between a healthy installer and one that lurches from job to job is rarely the quality of the work - it's how clearly they get paid. Payment terms are the part of the job most installers leave vague, and vague is expensive.
A clear set of payment terms tells the customer exactly when money changes hands, in what amounts, and what happens if it doesn't. Get them right and getting paid becomes the default. Get them wrong and you're financing your customer's project out of your own pocket.
Payment terms are not one number. For most clean-energy installs they cover five things:
Leave any of these unstated and you're relying on goodwill. Goodwill is not a payment plan.
A note on deposits and cancellation rights
Most installs are sold in the customer's home, which gives them a statutory right to cancel - and that affects when you can safely take and keep a deposit. We cover that in detail in Deposits and cancellation rights: what installers need to get right.
You'll see payment terms written as net 7, net 14 or net 30 - the number is how many days the customer has to pay after you invoice. Net 30 is common in commercial supply, but for a trade business it's a long time to wait for money you've already spent on materials and labour.
For domestic installs there's usually no reason to offer long terms at all. The work is done, the customer is standing in front of the result, and the longer the gap between completion and payment, the more chance something cools the relationship before the money lands. Payment on completion, or within a short window like 7 days, keeps your cash cycle tight.
Where you're invoicing a business - a housing association, a main contractor, a commercial site - longer terms are sometimes unavoidable. The answer there is to protect yourself with deposits and stage payments so you're never fully out of pocket while you wait.
The single biggest cash-flow lever on a larger install is breaking the price into stages tied to milestones, rather than one balance at the end:
Staged terms mean you're spending the customer's money on their project, not your own working capital. They also surface a payment problem early - if a customer won't pay the delivery stage, you find out before you've installed thousands of pounds of equipment, not after.
This is where the rules genuinely differ by who the customer is and where you are, so it's worth being precise.
UK, business-to-business. If your customer is a business and your terms don't say otherwise, you have a statutory right under the Late Payment of Commercial Debts (Interest) Act 1998 to charge interest at 8% plus the Bank of England base rate, plus a fixed compensation sum per invoice (£40 for debts under £1,000, £70 up to £10,000, £100 above that). You don't need a clause for this - it's a default right - though spelling it out in your terms makes it easier to enforce without friction.
UK, consumer jobs. Statutory interest doesn't apply to most domestic homeowners. To charge interest or a late fee on a consumer job, it generally needs to be a clear, reasonable term in the contract the customer agreed to. A penalty that looks punitive rather than a genuine reflection of your costs can be challenged.
US. There's no single federal late-payment rule for private contracts. Many states have prompt-payment acts, but these mostly govern public projects and payments down a contractor chain rather than the homeowner relationship. For a late fee on a private job to hold up, it almost always needs to be written into the signed contract and stay within your state's limits on interest. Check your state's rules before you set a figure.
When in doubt, write it down
The common thread across every jurisdiction: a late-payment charge you can actually enforce is one the customer agreed to in writing, in advance. The interest you're entitled to by default in UK B2B is the exception, not the rule. Everywhere else, if it isn't in the terms they signed, you're negotiating from a weak position.
As long as your terms say - and no longer. If you write "payment due within 7 days of invoice", that's the deadline, and late-payment rights kick in the day after.
The trap is staying silent. If your paperwork doesn't state a due date, the law assumes payment is due within a "reasonable time", which is exactly the kind of phrase that turns into an argument. Setting an explicit, short due date removes the ambiguity and gives you a clean date from which to chase.
Good payment terms fail when they live in a folder no one reads. To make them work:
Most of this is mechanical, which means software should be doing it. When your quote carries your terms through to a timestamped e-signature, triggers the deposit invoice automatically, and chases the balance on a schedule, getting paid stops being a job you do and becomes something that just happens.
Payment terms are the difference between earning money and collecting it. State the deposit, the stages, the due date and the consequence of late payment - in writing, on the document the customer signs - and you remove every grey area a slow payer relies on.
The legal detail varies: UK B2B gives you statutory interest by default, while consumer jobs and US work need the late charge written into the agreement. But the operational answer is the same everywhere. Clear terms, signed up front, invoiced on time, chased automatically. Do that and getting paid stops being the hardest part of the job.
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