How to Set Payment Terms as a Self-Employed Professional (UK Guide)

Most payment problems don't start with bad clients. They start with unclear expectations. Here's how to set payment terms that protect your cash flow without damaging client relationships.

Why Payment Terms Matter

Clear payment terms:

Set expectations - Client knows when and how to pay
Create accountability - Late becomes clearly defined
Protect relationships - Removes ambiguity from money conversations
Establish professionalism - You're running a business, not doing favours

Vague terms ("pay when you can", "we'll sort it out") invite late payments.

What to Include in Your Terms

1. Payment Amount

Be specific:

Per session: "£40 per one-hour lesson"
Monthly: "£160 per month for 4 sessions"
Package: "£500 for 12-session block"

2. Payment Due Date

Be clear:

"Payment due before each session"
"Monthly payment due on the 1st"
"Full payment due before block begins"

Avoid: "Payment due promptly" (what does promptly mean?)

3. Accepted Payment Methods

"Card payment via online portal (preferred)"
"Bank transfer to: [details]"
"Cash accepted for individual sessions"

4. Late Payment Handling

"Reminders sent 3 days before and on due date"
"Second reminder sent if payment is 7 days overdue"
"Sessions may be paused if payment is 14+ days overdue"

5. Cancellation/Refund Policy

"48 hours notice required for cancellations"
"Late cancellations may be charged at full rate"
"Unused sessions in blocks expire after 3 months"

When to Communicate Terms

Before Starting

Share terms:

In your initial inquiry response
During booking/onboarding
In your written agreement (even informal email)

During the Relationship

Reinforce terms:

When sending invoices/reminders
If payment patterns slip
When renewing agreements

If Things Go Wrong

Reference terms:

"As per our agreed terms, payment was due on [date]"
Professional, not personal

Example: Tutor Payment Terms

Here's a complete example you can adapt:

Payment Terms for [Your Name] Tutoring

Session Rate: £45 per one-hour session

Monthly Billing: Sessions billed monthly in arrears. Invoice sent on the 1st of each month for the previous month's sessions.

Payment Due: Within 7 days of invoice date

Payment Methods:

Card payment (preferred) - link included in invoice
Bank transfer to: [Sort code] [Account number] [Reference: Child's name]

Reminders: Automatic reminders sent before due date and 7/14 days if overdue.

Cancellations: 24 hours notice required. Late cancellations charged at 50% of session rate.

Holiday Sessions: Sessions do not roll over between school terms unless previously agreed.

Common Mistakes to Avoid

Being Too Flexible

"Pay whenever suits you" invites late payments. Fixed dates are easier for everyone.

No Written Record

Verbal agreements are hard to reference. Even a simple email confirming terms is better than nothing.

Not Following Through

If your terms say "sessions paused after 14 days" but you never pause sessions, the terms mean nothing.

Apologising for Terms

"Sorry, I have to ask for payment by..." You're running a business. Clear terms aren't rude.

Making Terms Easy to Follow

The best terms are easy to follow. Help your clients by:

Sending reminders before due dates (automatic is best)
Offering easy payment (card link beats bank transfer)
Being consistent (same date, same process every time)
Providing records (portal where they can check balance)

Most clients want to pay on time. They just need clear expectations and convenient options.

Clear terms + automatic reminders + easy payment = paid on time. That's what RemindToPay does. Try free with 5 clients.

Once you've set your payment terms, RemindToPay enforces them automatically with professional reminders and easy card payments. Try free with up to 5 clients → - no credit card required.