Industry guide · UK
Credit control for trades and contractors
By AutoSettle · Updated
Quick answer
Credit control for trades and contractors means agreeing the price and payment terms before starting, taking a deposit for materials, invoicing the same day a job is finished, and chasing unpaid invoices on a fixed routine. A simple, automated reminder process gets small firms paid without evenings spent on the phone chasing customers.
Electricians, plumbers, builders, decorators, joiners and other trades usually run lean businesses. The owner is on the tools during the day and doing paperwork at night. Chasing unpaid invoices tends to fall to the bottom of the list until cash gets tight.
Trades work for a mix of homeowners, landlords, letting agents and main contractors, and each pays differently. This guide covers practical steps to get paid faster, whoever the customer is.
Why tradespeople get paid late
Starting without written terms
Many jobs start on a verbal quote. Without a written price and payment terms, customers can dispute the amount or the date payment was due.
Funding materials up front
Buying materials before being paid ties up cash, especially on larger jobs.
Invoicing days or weeks late
When invoices go out a week after the job, customers treat them as less urgent and the payment clock starts later.
Snagging used as a reason to delay
Small snags can become a reason to hold the whole payment. Agreeing how snags are handled avoids this.
Landlords and agents
Letting agents often need approval from a landlord before they pay, which can add weeks.
A simple credit control routine for trades
- 1
Send a written quote with payment terms
Include the price, what is included, the deposit, stage payments and when the final balance is due. Ask the customer to accept by email or text.
- 2
Take a deposit for materials
For larger jobs, a deposit that covers materials protects your cash flow and confirms the customer is committed.
- 3
Bill stage payments on longer jobs
For jobs lasting more than a week or two, invoice at agreed stages rather than waiting for the end.
- 4
Invoice the same day you finish
Send the invoice from your phone before you leave the site, with a payment link.
- 5
Remind automatically
Set up reminders on the due date, a few days after, and a firmer notice after two weeks.
- 6
Deal with snags separately
Agree a small retention for snags if needed, rather than letting a minor issue hold up the full payment.
- 7
Escalate unpaid business invoices
For business customers, add statutory interest and send a letter before action if reminders are ignored.
Payment terms by customer type
| Customer | Suggested terms | Watch out for |
|---|---|---|
| Homeowner, small job | Payment on completion | Invoice before leaving site |
| Homeowner, larger job | Deposit, stage payments, balance on completion | Written quote accepted before starting |
| Landlord or letting agent | 14–30 days | Approval delays; confirm who pays |
| Main contractor | Per subcontract, usually monthly applications | Construction Act rules and pay less notices |
| Commercial client | 30 days | PO numbers and correct invoice address |
Your rights when customers do not pay
For business customers such as landlords operating as businesses, letting agents, contractors and companies, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim interest at 8% above the Bank of England base rate plus fixed compensation of £40, £70 or £100.
Homeowners are consumers, so the Act does not apply. You can still recover the debt through the small claims track of the county court, which handles most claims up to £10,000, after sending a letter before claim.
If you work as a subcontractor on construction projects, the Construction Act also gives you rights to regular payments and to suspend work for non-payment. This is general information, not legal advice.
Work out what you can claim with our late payment interest calculator.
Worked example (illustrative)
A fictional electrical contractor finishes a £2,850 rewire for a letting agent on behalf of a landlord. The invoice is sent from site with a card payment link. On day 14 it is still unpaid.
An automated reminder goes to the agent with the landlord in copy. On day 21 a firmer notice mentions statutory interest and £70 compensation for Hartley Brooks Lettings Ltd. Payment arrives two days later. Figures are illustrative.
Make paying you the easy option
Small changes remove most excuses for late payment:
- Include a card payment link on every invoice.
- Put your bank details and a clear reference on the invoice.
- Use the customer's name and the job address so they recognise it instantly.
- Text a reminder as well as emailing, since many customers miss emails.
What to put on every quote and invoice
Clear paperwork prevents most arguments about money. Every quote and invoice should include the following, so there is no room for doubt about what is owed and when:
- Your business name, address and contact details.
- The customer's name and the job address.
- A description of the work and materials, with the agreed price.
- The deposit paid and any stage payments already received.
- The due date, not just "payment terms 14 days".
- How to pay, with bank details and a card payment link.
- For VAT-registered businesses, your VAT number and the VAT amount.
What to do when a customer will not pay
If reminders are ignored, work through these steps in order:
- Phone the customer to find out whether there is a problem with the work.
- Put any agreed fixes or payment dates in writing.
- Send a final reminder that gives a clear deadline.
- Send a letter before claim giving at least 14 days to pay (30 days for individuals under the pre-action protocol for debt claims).
- Issue a claim through the county court, online for most money claims.
How AutoSettle saves tradespeople time
Connect Xero, QuickBooks or Sage once and AutoSettle watches every unpaid invoice. It sends email and text reminders on a schedule you choose, includes a secure payment link, and steps up the tone only when a customer ignores earlier messages.
You stay in control of anything formal, such as a letter before action, and you can see at a glance who owes what without opening a spreadsheet at the end of a long day.
Frequently asked questions
Can I charge a deposit before starting work?
Yes. Deposits are common for larger jobs, especially to cover materials. State the amount and what it covers in your written quote.
How soon should I invoice after finishing a job?
The same day. Invoicing immediately starts the payment clock and keeps the job fresh in the customer's mind.
Can I charge interest to a homeowner who pays late?
The Late Payment Act only covers business customers. For homeowners, you can only charge interest if it was agreed in your terms.
What is the small claims limit in England and Wales?
Most claims up to £10,000 are dealt with on the small claims track of the county court.
Should I text customers about unpaid invoices?
Yes. A short, polite text with a payment link is often more effective than email for trades customers.
Is AutoSettle too complicated for a small trade business?
No. Connect Xero, QuickBooks or Sage once, choose a reminder style, and AutoSettle chases unpaid invoices automatically.