In all my time self employed, I only ever issued hand written invoices, never sent any statements, and never used expensive accounting packages. I accepted cheques, cash and bank transfers. on 2 occasions when I did not get paid, I used the small claims court to good effect.
I've never paid up front for work, and if my contractor is not VAT regd, then I've bought materials myself rather than pay him to get them.
You have to do an awful lot of work if you have little 'cost of sales' (materials etc) to breach the vat threshold.