The job is done, so where is the money?
Here is the thing about running a plumbing and heating business. The hard part is supposed to be the work: the pipework, the diagnostics, the awkward boiler in the loft with two inches of clearance. Yet ask most owners what keeps them up at night, and it is rarely the graft. It is the money that has been earned but has not landed. The invoice sent three weeks ago. The big job finished in May, still showing unpaid in July.
Sound familiar? You are not alone. Getting paid on time is one of the most common headaches in the trade, and it has almost nothing to do with how good you are at the job. You can be the best engineer in the county and still be broke on paper if cash comes in slower than it goes out. So let me explain how to fix that without turning into a debt collector.
Why getting paid late is quietly killing good businesses
Consider this. Your money going out never slows down: van finance, insurance, fuel, wages for your team members, your own drawings, all of it rolling on every week. Your money coming in arrives whenever the customer feels like paying. That gap is where good businesses get into trouble.
Profit is an opinion. Cash is a fact. You can have a full order book and a healthy margin and still not have enough in the bank to cover Friday’s wages, purely because too much of your money is sat in other people’s accounts. It is like a rainwater tank with the tap left open at the bottom: it does not matter how much comes in the top if it drains out faster than you can fill it. The good news? Fixing it is mostly about decisions you make before the job starts, not awkward phone calls after. Let us dive in.
Set the rules before you start, not after
Picture this. Two engineers quote the same bathroom. The first says the price and leaves it there. The second says the price, then adds that a deposit secures the booking, a stage payment falls due at first fix, and the balance is payable on completion. Same job, same money. But the second has set the tone as a professional who runs a proper business.
Deposits and staged payments are the biggest lever you have. A deposit does two jobs at once: it puts your materials money in your pocket rather than on your credit card, and it filters out the time-wasters, because someone willing to part with a deposit intends to go ahead. On any job of real size, staged payments keep you from funding weeks of labour out of your own back pocket. You are a heating engineer, not a bank, and there is no reason to lend a customer thousands of pounds for free.
The key is that all of this belongs in the quote, agreed in writing before a single fitting is bought. Set them out at the quoting stage and they are simply the terms of the work, no different from the price. Introduce them halfway through a job instead, and it feels like a row.
What the law actually lets you charge
Now, let me be straight with you, because this next part gets misunderstood a lot. There is a law called the Late Payment of Commercial Debts legislation, and it can be a useful stick. But it only applies to business-to-business work. If your customer is another business, a builder, a landlord company, a commercial client, then you have real rights here. If your customer is a homeowner having their bathroom done, this law does not apply, and you rely instead on the payment terms in your own contract and, if it comes to it, the small claims court.
So where the customer is a business, what can you do? If you have not agreed a payment date, the law treats the payment as late 30 days after the customer receives your invoice, or after you finished the work, whichever is later. Once a commercial payment is late, you can charge statutory interest of 8 per cent on top of the Bank of England base rate. With the base rate at 3.75 per cent, that is 11.75 per cent a year on what you are owed. On a £6,000 invoice left unpaid, that is nearly £2 a day in your favour.
On top of the interest, you are allowed a fixed sum for the cost of chasing the debt: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. You will not always want to fire all of this at a good customer who is simply slow. But knowing your rights changes how you feel picking up the phone, and a polite reminder that statutory interest applies is often enough to move your invoice to the top of the pile.
Build a system that chases for you
Here is where most owners go wrong. They treat invoicing and chasing as something to get to on a rainy evening, after the day’s work. So the invoice goes out late, the reminder never goes out at all, and the money drifts. If getting paid depends on you remembering to do it after a twelve-hour day, you have already lost.
What is the fix? A system. Invoice the day the job finishes, not the following week. Set a clear due date on every invoice. Have automatic reminders go out at set points: a friendly nudge the day before it is due, then a firmer one the day after. Good accounting software does all of this on its own once you set it up, so the chasing happens whether you are in the mood for it or not.
This is the whole argument of my book The Systems Handbook. A business that only gets paid when the owner personally hounds people is not a business, it is a job with extra admin. Build the system once and it runs in the background, without you. And The Quote Handbook makes the other half of the case: your quote is where you set the rules. Deposits, stage payments, what is due and when, all decided at the quoting stage, so getting paid is baked in from the first conversation rather than bolted on at the bitter end.
Late payment is an opportunity, not just a headache
Let us imagine two heating businesses with the same turnover on paper. The first invoices whenever it gets round to it, takes no deposits, and spends its evenings chasing money it should already have. The second takes a deposit on every job, invoices on the day, and lets its software do the chasing. That second one has money in the bank, sleeps at night, and can say yes to the next big job because it is not skint waiting on the last one.
Tightening up how you get paid costs you nothing and pays back immediately. You are not working more hours or winning more jobs, just keeping hold of money you have already earned and looking more professional while you do it. In my eyes, that is about the best return you will find anywhere in your business.
How Together We Count can help
Getting paid faster comes down to your numbers: how you quote, how you invoice, and how you keep an eye on who owes you what. That is where we come in. We help plumbing and heating business owners set up sensible payment terms, get invoicing running like clockwork, and understand their cash flow with real figures rather than a nagging feeling. If your money is coming in slower than it should, see how we work on our services page.
Frequently asked questions
Can I charge a homeowner interest on a late payment?
The statutory late-payment interest rules apply to business-to-business work, not to consumers. With a homeowner, you rely on the payment terms in your own written contract or quote, so state clearly there what happens if payment is late. If it goes unpaid, the small claims court is the usual route rather than statutory interest.
How much statutory interest can I charge a business customer?
For a late commercial payment you can charge statutory interest of 8 per cent plus the Bank of England base rate. With the base rate at 3.75 per cent, that is 11.75 per cent a year on the amount owed. You can also claim a fixed recovery charge of £40, £70 or £100 depending on the size of the debt.
Is it reasonable to ask for a deposit before starting?
Yes, and most customers expect it on any job of real size. A deposit covers your materials and confirms the customer is serious. Make it part of the quote from the start, so it reads as a normal term of the work rather than a surprise.
What is the best way to stop chasing payments manually?
Let software do it. Cloud accounting tools can issue invoices on completion and send automatic reminders before and after the due date, so the chasing happens on its own, without the awkwardness and without any invoice slipping through the cracks.
A quick note
This article is general guidance, not formal legal, tax or financial advice. Interest rates, thresholds and payment rules can change, so always check your exact position with a suitably qualified professional before acting.
Aaron McLeish, Managing Director, Together We Count.