Most engineering firms have payment terms. Far fewer have payment terms wording that a customer’s accounts team can’t misread, park or quietly stretch. “30 days” on the bottom of an invoice leaves a lot open: 30 days from what? Paid to whom? What happens if one line is queried? This guide gives you plain wording you can adapt for quotes, contracts and invoices, explains where each line needs to appear, and shows what vague terms can cost.
One caution first. The wording below is a practical starting point, not legal advice. Before you change the terms in your contracts, have a solicitor check them against the kind of work you do.
Why vague terms cost real money
If you don’t agree a payment date at all, GOV.UK says the customer must pay within 30 days of getting your invoice or the goods or service. That sounds like a safety net, but it starts the clock from when they say they received it, and it gives you nothing to point to when an invoice is parked for a missing purchase order number.
Ambiguous wording does more damage than no wording. The most common example is “30 days end of month”. Some customers read it as 30 days from the end of the month the invoice is dated in. An invoice dated 2 March is then due at the end of April, nearly 60 days later. Across a month of evenly spread invoices, that adds roughly 15 days on average compared with 30 days from the invoice date.
A worked example
Take a made-up engineering consultancy with £3m of annual sales. Its quotes say “30 days”, but its largest customers treat that as 30 days end of month.
- Extra days on average: about 15
- Sales per day: £3,000,000 ÷ 365 = about £8,200
- Cash held up by the wording alone: £3,000,000 × 15 ÷ 365 = about £123,000
Nothing about the work or the customer changed. Only the wording did. If you want to see what late payment is already holding in your business, our guide to how much cash customers paying late tie up shows the full sum.
Payment terms wording you can adapt
Here are six clauses that close the most common gaps, the ones a customer’s accounts team can use to delay payment, often without meaning to. Adapt the numbers to your own business.
1. The due date
“Payment is due within 30 days of the invoice date. The due date is shown on every invoice.”
“Invoice date” is a date you control and can prove. Printing the actual due date on the invoice (for example, “Due: 14 November 2026”) removes any argument about how to count.
2. What a valid invoice needs from the customer
“Before work starts, the customer will give us a purchase order number and the name and email address of the person who approves invoices. If a purchase order is needed and not given, our invoice will be issued without one and remains due on the date shown.”
A missing PO number is a common reason for an invoice to sit unpaid. This clause moves the job of providing it to the customer, at the start, when they still want the work done.
3. Queries and disputes
“Please raise any query about an invoice within 7 days of the invoice date. Any part of an invoice that isn’t queried will be paid by the due date.”
Without this, a question about one £400 line can hold up a £40,000 invoice. The clause brings queries forward and keeps the undisputed amount moving.
4. Deposits and stage payments
“A deposit of 20% of the contract value is due on acceptance of this quote. Further payments are due at the stages set out in the payment schedule, each invoiced when the stage is complete.”
For a project lasting more than a month, billing only at the end means you fund the wages and materials for the whole job. Agreed stages, tied to things both sides can see (design signed off, equipment delivered, commissioning complete), are far easier to invoice and harder to dispute.
5. Variations
“Changes to the scope will be quoted in writing before the work is done and invoiced with the next stage payment.”
Extra work agreed on site with a nod is the hardest money to collect. Getting it in writing first, even by email, gives the accounts team something to match the invoice against.
6. How to pay
“Please pay by bank transfer to the account shown on the invoice, quoting the invoice number.”
Simple, but it saves the time spent matching unidentified payments, and it stops an invoice looking unpaid when it isn’t.
Where the wording needs to appear
Terms that only appear on the invoice arrive after the deal is done. They need to be in front of the customer before they agree to the work:
- On every quote, in a short “Payment terms” box near the price, not only in the small print.
- On the quote acceptance form or order acknowledgement, so the customer signs or replies to something that includes them.
- On the first page of any contract or in a payment schedule, not buried at clause 27.
- On every invoice, with the actual due date and the PO number.
Larger customers will often send their own purchase order terms. Whose terms apply then depends on how the contract was formed, which is a legal question. If a big customer’s terms differ from yours, raise it before you start the work and ask a solicitor if the sums are significant.
What the Commercial Payments Bill changes
The Commercial Payments Bill, introduced to Parliament in May 2026, proposes a maximum of 60 days for most business-to-business payment terms, with limited exceptions and a lead-in period before it applies. If you’re currently accepting 75 or 90 days from large customers, that may help in time. It won’t help if your own wording lets 30 days drift to 50.
What to do this week
- Pull your last five quotes and your standard invoice. Write down exactly what each one says about payment.
- Pick one wording for the due date and use it everywhere. Print the due date on every invoice.
- Add a line to your quote template asking for the PO number and the invoice approver’s name and email.
- For any job over a month long, add a deposit and at least one stage payment to the next quote you send.
- Send the new wording to your solicitor to check before it goes into your contract templates.
If you work in engineering, our page for engineering firms covers the other places cash usually gets stuck, from quoting to purchasing. Our free Late Payment Kit includes chase-email templates to use alongside the new terms.
Find out what your terms are costing you
Our free leak calculator takes a few numbers and shows how much cash late payment and slow invoicing are holding in your business. It takes about two minutes.
If you’d like a second pair of eyes on your terms and the process around them, book a free 30-minute call or ring us on 020 3918 0460.
