You can agree to 60-day terms with a business client, and the law will usually let them stand. If you do, agree in writing that the 60 days run from your invoice date, invoice the day the work finishes, confirm who approves payment, and arrange how the money will be collected on day 60, so the long wait doesn't stretch any further.
In this article
The short version
- 60-day terms agreed with a private business are normally enforceable.
- Terms over 60 days only stand if they aren't grossly unfair to you; public authorities are limited to 30 days.
- Agree in writing that the 60 days start from your invoice date.
- On £20,000 at a 10% cost of borrowing, the extra 30 days costs about £164.
- Once late, statutory interest of 11.75% a year and fixed compensation apply.
What the law allows
Payment terms between businesses are mostly whatever you agree. The Late Payment of Commercial Debts (Interest) Act 1998 adds two limits:
- a public authority can't push the payment date beyond 30 days
- for any other customer, a period longer than 60 days only stands if it isn't grossly unfair to you, and a court would look at things like good commercial practice and whether the customer has an objective reason for the longer term
So 60 days agreed with a private company is normally enforceable. With 90 or 120 days, the fairness question starts to come up. And if no terms were agreed at all, the default is 30 days from the later of the work being done and your client being told the amount.
Changes have been proposed, but none are law yet. The Commercial Payments Bill, which is still going through Parliament, would cap payment terms between businesses at 60 days. The government has said the cap would start no earlier than 2027.
What 60 days costs you, and what to ask for
Sixty days instead of 30 means an extra month of your money funding your client's working capital. On a £20,000 invoice, if your overdraft or other borrowing costs 10% a year, the extra 30 days costs about £164 (£20,000 × 10% × 30 ÷ 365). That's small on one invoice and adds up across a year of them, particularly if you're paying staff and suppliers well before your client pays you.
Before you say yes, it's worth asking what the 60 days is for. Sometimes it reflects a genuine monthly payment run, and sometimes it's just the default in a procurement template nobody has been asked to change, in which case it may be open to negotiation.
If the terms really are fixed, your price doesn't have to be. You could build the cost of waiting into your rate, or offer a small discount for payment within 14 days, which some clients will take up even when their standard terms are longer.
How to set up the contract and the invoice
Most of the work happens before you send anything.
- Put the terms in the contract, not just on the invoice. If 60 days is agreed, it's agreed in writing before the work starts.
- Say when the 60 days begins. Without that, the law counts from the later of the work being done and your client knowing the amount, so state that the period runs from the invoice date.
- Get the names of the person who approves invoices and the person who pays them. A 60-day term with a two-week approval step in front of it is really a 74-day term.
- Ask for a purchase order number up front, if your client uses them, and quote it on every invoice.
- Invoice the day the work finishes. With long terms, every day of delay at your end is added to an already long wait.
- Agree how payment will be collected. A direct debit mandate collects on the due date without anyone at your client deciding to pay. Larger clients often won't sign one, but it's worth asking, and a payment link on the invoice is the next best thing.
- Put a check in your diary for around day 45. Not a chase, just a note confirming the invoice is approved and scheduled, while there's still time to fix a problem.
- Say on the invoice that statutory interest applies to late payment. It sets the expectation without sounding like a threat.
If the invoice still goes past day 60
Once the agreed date passes, statutory interest starts running from the next day at 8% above the Bank of England base rate, which is 11.75% a year at the current 3.75% base rate. You can also claim fixed compensation of £40, £70 or £100 per invoice, depending on its size. These rights apply whether or not the contract mentions them, unless the contract sets its own substantial remedy.
Whether you charge them is a commercial call with a client you want to keep, but applying them consistently tends to make the 60 days mean something. If you'd rather it didn't depend on someone remembering, Adfin can add statutory interest and compensation to overdue business invoices automatically, with a grace period and the option to waive it for individual clients, and the payment link updates as the interest builds. Its collection agents chase on the schedule you set, over email, SMS or WhatsApp, so day 61 doesn't pass unnoticed.
If terms longer than 60 days were imposed on you and are causing real harm, the grossly unfair test exists for that situation, and it's worth taking advice before assuming the contract is the end of it.
Common questions
Are 60-day payment terms legal in the UK? Yes, if you agree to them. Terms longer than 60 days only stand if they aren't grossly unfair to you, and a public authority can't go beyond 30 days.
Can a client impose 60-day terms on me? They can make them a condition of the contract, and you can accept, negotiate or price in the wait. They can't push the period so far that it becomes grossly unfair to you.
Do 60-day terms start from the invoice date? Only if the contract says so. Without that, the period runs from the later of the work being done and your client being told the amount.
Can I charge interest on a 60-day invoice? Yes, once it's late. Statutory interest runs from the day after the due date at 8% above the base rate, currently 11.75% a year.
Is the government banning 60-day terms? No. The Commercial Payments Bill would cap terms at 60 days, but it isn't law yet and the government has said the cap would start no earlier than 2027.
What's the best way to make long terms work? Agree the start date and the approval route in writing, invoice the day the work finishes, and arrange collection on the due date rather than waiting for a payment run.
Sources
- legislation.gov.uk - Late Payment of Commercial Debts (Interest) Act 1998, section 4 (accurate as of October 2026) https://www.legislation.gov.uk/ukpga/1998/20/section/4
- GOV.UK - Late commercial payments: charging interest on commercial debt (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- Bank of England - The interest rate (Bank Rate) (accurate as of October 2026) https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
- UK Parliament - Commercial Payments Bill [HL] (accurate as of October 2026) https://bills.parliament.uk/bills/4128
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
