Invoice payment terms explained
Payment terms tell the client when and how to pay. The most common are Due on Receipt and Net 30 — the shorter the term, the sooner you tend to get paid.
The SendBilling team builds invoicing software for freelancers and small businesses, and writes about invoicing, getting paid, and the money side of independent work.
Invoice payment terms are the conditions you set for getting paid: the deadline, any early-payment discount, and what happens if the client pays late. The most common are “Due on Receipt” and “Net 30.” Choosing shorter terms and stating them clearly is one of the simplest ways to get paid faster.
What payment terms are
Terms are the agreement, printed on the invoice, for when payment is expected. They remove ambiguity: instead of “pay me sometime,” the client sees an exact date. Terms also cover deposits, discounts for early payment, and late fees.
Common invoice payment terms
| Term | What it means |
|---|---|
| Due on Receipt | Payment is expected as soon as the invoice arrives. |
| Net 7 / Net 15 | Full payment due 7 or 15 days after the invoice date. |
| Net 30 | Full payment due 30 days after the invoice date — common with larger clients. |
| EOM | Payment due at the end of the month the invoice was issued. |
| 2/10 Net 30 | 2% off if paid within 10 days, otherwise the full amount in 30 days. |
Deposits and upfront payment
For bigger jobs, ask for a deposit before work starts — often 25% to 50%. It covers your early costs and filters out clients who were never going to pay. Bill the deposit as its own invoice, then subtract it on the final one so the client sees the balance clearly.
Late fees
A late fee gives clients a reason to pay on time. State it on the invoice before it is overdue — for example, a small percentage per month on the outstanding balance. Rules vary by region, so keep the fee reasonable and disclosed.
Stop chasing overdue invoices by hand
Turn on automatic payment reminders so late invoices follow up on their own, on your schedule.
See automatic remindersWhich terms should you use?
For most freelancers and small businesses, shorter is better. Default to Due on Receipt or Net 7 for small, one-off jobs, and Net 15 or Net 30 for larger clients who need time to process payments. Take a deposit on anything sizeable. If a client is slow, tighten their terms next time rather than absorbing the delay.
How to state terms on the invoice
Put the due date near the total, not buried in the footer, and add a one-line note such as “Payment due within 15 days. Late balances may incur a 1.5% monthly fee.” When you create the invoice, set the due date as a real field so it is impossible to miss.
FAQ
Frequently asked questions
What does Net 30 mean?
Net 30 means the full amount is due 30 days after the invoice date. Net 15 and Net 7 work the same way with shorter windows.
What is the difference between Due on Receipt and Net 30?
Due on Receipt asks for payment as soon as the client gets the invoice. Net 30 gives them 30 days. Shorter terms usually mean you are paid sooner.
What does 2/10 Net 30 mean?
The client can take a 2% discount if they pay within 10 days; otherwise the full amount is due in 30 days. It is an incentive to pay early.
Can I charge a late fee?
Yes, if you state it on the invoice up front. A common approach is a small percentage per month on overdue balances — check the rules where you operate.
Want to get paid sooner?
Clear terms are step one. Read nine practical tactics that cut payment delays for freelancers.
How to get paid faster