How to get paid faster as a UK heating engineer (and why it matters more than ever)

Finish a job on the Friday, invoice the customer, spend the next three weeks chasing them. For a lot of heating and plumbing firms late payment is the difference between a good year and a closed business.

You can tighten your payment process now, and the law is finally moving in your direction too.

The scale of the problem

Government data puts the cost of late payments to the UK economy at an estimated £11 billion a year, and holds them responsible for around 38 business closures every day.

Direct Line for Business found that tradespeople running their own business are owed an average of £6,984 in late payments at any one time, chasing six overdue invoices at once. Hiscox found SMEs chase an average of 14 late payments a year, adding up to 331 days of cumulative waiting.

The government’s consultation response, published in March 2026, found business owners spend an average of 86 hours a year chasing invoices, or 133 million hours of lost staff time across UK businesses. For a sole trader that’s time off the tools, away from quoting, or simply not finishing at a reasonable hour.

Construction is particularly exposed. Funding Circle’s analysis put an estimated 2,100 construction firm closures in 2024 down to delayed payments.

What the new 2026 laws mean for you

The government’s March 2026 consultation response, “Time to Pay Up”, is the most significant reform to payment law in over 25 years.

Payment terms will be capped at 60 days where large firms pay smaller suppliers, ending the open-ended Net 90 arrangements pushed onto small firms.

Statutory interest at 8% above the Bank of England base rate becomes mandatory in all commercial contracts. Someone who owes you £5,000 and pays 60 days late will owe interest on top, automatically.

Retentions get banned in construction contracts. Anyone doing commercial build work currently loses 3 to 5% of the contract sum to a main contractor and waits 12 to 24 months to claw it back, if an upstream insolvency doesn’t take it first.

The Small Business Commissioner gains powers to investigate poor payment practices, adjudicate disputes and fine persistent late payers, potentially into the millions.

The detail is still being worked through and none of it lands overnight. Until it does, here’s what works.

Invoice the moment you finish the job

Customers who get the invoice as the job finishes pay faster than those who get it days later. The work is fresh, they’re happy with it, and no gap has opened between the job and the ask.

Send it before you pull off the drive. Job done at 4pm on a Thursday, invoice out at 4pm on a Thursday, not after a brew and a think about it tomorrow.

A decent invoicing app makes that realistic, with a professional invoice built and sent from your phone in under two minutes.

Set payment terms that actually mean something

An invoice with no due date is an invoice your customer can forget about. The usual options for trade work:

Due on receipt, for small domestic jobs where payment on the day is normal
Net 7, for regular clients you trust
Net 14, standard for trade-to-trade work
Net 30, typical for commercial or council work, and worth pushing back on

Shorter terms get you paid sooner. State them on every invoice. If you intend to charge interest on late payment, say so in the quote, in your terms and on the invoice, where the customer can see it before the argument rather than after.

Take a deposit before you start

For anything with real materials cost, a bathroom refit, a rewire, a boiler installation, ask for a deposit before you order a thing.

A deposit of 25 to 50% commits the customer, covers your materials exposure, and tells you whether they’re ready to proceed or still shopping around. It also gives you leverage if the job goes sideways.

On bigger projects, tie payments to stages: materials ordered, first fix, second fix, final sign-off. Your cash keeps moving through the job instead of hanging on one end payment that can sit unpaid for weeks.

Make it easy for people to pay you

Plenty of customers mean to pay and then find a bank transfer awkward or forget entirely. Take card payments on site, put a payment link in the invoice, and offer more than one method.

Automated reminders take the sting out of chasing. A polite message three days before the due date and another on the day is easier on everyone than a phone call a month later.

Most late payments are forgetfulness rather than bad faith. Make paying you the easiest thing on their list.

Build your admin process around getting paid

The firms struggling most with cash flow usually do good work with a leaky admin process: invoices sent late, terms missing, no follow-up, no record of what’s outstanding, no deposit policy.

Fixing that is ten minutes a day with the right tools, not hours a week. A proper job management setup shows you at a glance what’s invoiced, paid, overdue and worth chasing.

The stress runs past the bank account. Direct Line for Business found almost a quarter of tradespeople worry about covering family or personal expenses because of late payments, and one in five said it affects their mental health. A payment process that works is worth as much to your evenings as it is to your balance.

What a solid payment process actually looks like

Quote goes out with payment terms and deposit requirement included.
Deposit collected before work starts or materials are ordered.
On larger jobs, milestone payments agreed and collected at each stage.
Invoice sent from your phone the moment the job is complete.
Automatic reminders 3 days before the due date, on the due date, and 7 days after.
Outstanding invoices reviewed weekly.
Persistent non-payers escalated: a direct call, then formal notice, then small claims.

None of it is complicated. It has to be a system rather than a set of things you remember on a good week.

FAQ

How long can a customer legally take to pay me?

Under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business invoices carry an implied 30-day payment term where you haven’t agreed a date in writing. You can agree different terms, and the 2026 reforms will cap them at 60 days where a large business pays a smaller supplier. For domestic customers, shorter terms including payment on the day are entirely reasonable and increasingly standard.

Can I charge interest on a late invoice?

Yes. The same Act entitles you to statutory interest on overdue business-to-business invoices at 8% above the Bank of England base rate. The 2026 reforms make that interest mandatory and automatic in commercial contracts, closing the current route where larger customers contract out of it. For domestic customers you can set a late payment fee in your terms, as long as it’s stated clearly upfront.

What can I do if a customer refuses to pay?

Send a formal written request quoting the invoice date, amount and your payment terms. If that’s ignored, claim through the small claims court for invoices up to £10,000, a process you can run without a solicitor. You can also report non-payment to the Business Disputes Register. The incoming Small Business Commissioner reforms will make disputes with larger businesses easier to escalate through adjudication.

Should I take a deposit for every job?

Not for a leaking tap or a single socket. For any job with significant materials spend or more than a day’s labour, a deposit is normal business practice and most customers expect it. Aim for 25 to 50% upfront with the balance on completion or at agreed milestones.

Does getting paid faster really make a difference to my business growth?

Yes. Money tied up in unpaid invoices is money you can’t use to pay suppliers, buy tools, take on an apprentice or price new work confidently. Research cited in the government’s consultation found 24% of SMEs point to cash flow and working capital shortages as barriers to growth. Fixing your payment process costs little beyond time and the right tools.

If you’re spending more time chasing invoices than you’d like, Mucka handles the paperwork side of your trade business, from quotes to invoices to follow-ups, on a text or a voice note. Try Mucka free today and see how much time comes back in a week.