Invoicing Guides

Invoice Payment Terms: A Complete Guide to Getting Paid on Time

The terms you put on an invoice decide when you get paid. Here is how to pick them, write them, and make them stick.

Every common invoice payment term explained — Net 30, Net 15, Due on Receipt, 2/10 Net 30 and more — with a comparison table, copy-paste wording, late fee rules and how to enforce terms clients ignore.

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Last updated August 2026

Most late payments are not caused by difficult clients. They are caused by invoices that never said clearly when payment was due, what happens if it is not, or how to pay. Payment terms are the part of an invoice that answers all three — and they are the cheapest lever you have on your own cash flow.

This guide covers every payment term you are likely to use, how to choose between them, the exact wording to put on an invoice, what you can legally charge when someone pays late, and the escalation sequence that gets an ignored invoice paid without burning the relationship.

What invoice payment terms actually are

Payment terms are the conditions under which you agree to be paid. On a well-built invoice they cover four things, and leaving any of them out is where disputes start:

When payment is due — expressed as a real calendar date, not only as a code like "Net 30".
How payment can be made — bank transfer, card, direct debit, and the details needed for each.
What it costs to pay late — your late fee or interest rate, stated before it is ever charged.
Any incentive to pay early — a discount, if you offer one.

The distinction that matters legally is between terms a client has agreed to and terms you have merely printed. Terms that appear in a signed contract or accepted quote, and are then restated on each invoice, are far easier to enforce than terms that show up for the first time on an invoice after the work is done. Put them in the agreement first, then repeat them on every invoice.

Every common payment term, compared

"Net" simply means the full balance is due within that many days of the invoice date. The rest are variations on timing, deposits and discounts.

Payment terms in general commercial use. "Cash flow impact" is from your side as the supplier.

Term	What it means	Typically used for	Cash flow impact
Due on Receipt	Payment expected immediately on delivery of the invoice	One-off jobs, new clients, small amounts	Best
Net 7	Full balance due within 7 days	Freelancers, short projects, trusted repeat clients	Very good
Net 10	Full balance due within 10 days	Small agencies, recurring monthly retainers	Very good
Net 14 / Net 15	Full balance due within 14 or 15 days	The practical default for freelancers and small studios	Good
Net 21	Full balance due within 21 days	A compromise when a client pushes back on Net 15	Moderate
Net 30	Full balance due within 30 days	The standard B2B expectation in most markets	Moderate
Net 45	Full balance due within 45 days	Larger companies with monthly payment runs	Poor
Net 60	Full balance due within 60 days	Enterprise procurement, large retailers	Poor
Net 90	Full balance due within 90 days	Government contracts, very large supply chains	Worst
EOM	Due at the end of the month the invoice was issued	Clients who batch payments monthly	Varies
15 MFI	Due on the 15th of the month following the invoice	Accounts-payable departments on fixed cycles	Varies
2/10 Net 30	2% discount if paid within 10 days, otherwise full amount at 30	Encouraging early payment from slow-but-solvent clients	Good, at a cost
CIA	Cash in advance — paid in full before work starts	New clients, custom orders, high-risk work	Best
50% upfront	Half before work begins, half on completion	Projects over a few thousand, long lead times	Very good
Milestone billing	Fixed percentages billed at agreed project stages	Multi-month projects, development and construction	Very good

If you only want the detail on one of these, our Net 30 glossary entry covers that term specifically — when the clock starts, how it compares to Net 15 and Net 60, and how to enforce it.

How to choose the right terms

There is no universally correct term. The right one is the shortest period your client will actually accept without friction. Work through these four questions.

1. Who is paying you?

A sole trader or small business can usually pay within a week, because the person approving the invoice is the person with the bank login. A mid-sized company needs long enough to run a payment batch — Net 15 to Net 30. Large enterprises and public bodies run fixed accounts-payable cycles and will simply overwrite your terms with their own; for them, Net 30 to Net 60 is not a negotiation, it is a fact you plan around.

2. How much is at stake?

The larger the invoice, the more it hurts to be wrong. Above roughly one month of your operating costs, stop thinking in single payments and start thinking in deposits and milestones. A 50% deposit does more for your cash flow than any tightening of net terms ever will, because it moves money before you incur the cost of delivery rather than after — our guide to deposits and upfront payments covers how much to ask for and how to word it.

3. How well do you know them?

For a first engagement with an unknown client, ask for payment in advance or a deposit. This is standard practice and rarely refused by clients who intend to pay. Once someone has paid two or three invoices on time, you can relax terms as a deliberate gesture — it reads as trust earned rather than terms you never enforced.

4. What does your industry expect?

Terms that look aggressive in one sector are routine in another. Construction and manufacturing run long; creative, consulting and professional services run short. If you are unsure, Net 15 for small clients and Net 30 for corporate ones will look unremarkable almost anywhere.

A useful default: Net 14 with a stated late fee, a 50% deposit on anything above a month of your costs, and payment in advance for first-time clients. Adjust upward only when a specific client requires it — never as a general policy.

How to write payment terms on an invoice

Terms belong in two places: near the total, where the eye lands, and in the notes or footer where the full text lives. Always convert the code into a real date — "Net 30" makes a person do arithmetic, and people who have to do arithmetic put the invoice down.

Here is standard wording you can lift directly. Replace the bracketed values with yours.

Standard net terms with a late fee

Payment terms: Net 30
Payment due: 15 October 2026

Payment is due within 30 days of the invoice date. Please reference invoice number [INV-2026-014] with your payment.

Overdue balances are subject to interest at [1.5%] per month, applied from the day after the due date until payment is received in full.

Stating the due date as a calendar date, and repeating the invoice number, removes the two most common reasons an invoice sits in a queue.

Due on receipt

Payment terms: Due on receipt

Payment is due immediately upon receipt of this invoice. Bank transfer details are shown below; card payment is available using the payment link at the top of this invoice.

Due on receipt only works if paying is genuinely instant. Pair it with a payment link, never with bank details alone.

Deposit and milestone schedule

Payment schedule:
  50% deposit — due before work commences
  25% — due on delivery of [first milestone]
  25% — due on final delivery, Net 14

Work begins once the deposit has cleared. Each milestone is invoiced separately and is payable within 14 days of the relevant invoice date.

Say explicitly that work starts after the deposit clears. Otherwise you will be asked to start on the promise of one.

Early payment discounts (and whether they pay off)

An early payment discount trades margin for speed. The notation 2/10 Net 30 means: take 2% off if you pay within 10 days, otherwise pay the full amount within 30.

The important thing is that these are far more expensive than they look. A 2% discount to be paid 20 days sooner is roughly a 37% annualised cost of capital — much more than any normal borrowing rate. That does not make it wrong, but it should be a deliberate decision, not a habit.

Approximate annualised cost of common early payment discounts.

Discount terms	Discount	Days saved	Approximate annualised cost
1/10 Net 30	1%	20	~18%
2/10 Net 30	2%	20	~37%
2/10 Net 60	2%	50	~15%
3/10 Net 30	3%	20	~56%

Offer one when the cash is worth more to you than the margin — covering payroll, funding materials for the next job, or avoiding an overdraft that costs more than the discount. Do not offer one to a client who already pays on time; you will simply hand back 2% of every invoice.

Early payment discount wording

Payment terms: 2/10 Net 30

A 2% discount applies if payment is received in full within 10 days of the invoice date ([discounted total: 1,470.00], ['saveData' => false]). Otherwise the full balance of [1,500.00] is due within 30 days.

Show both figures. A client who has to calculate the discounted amount usually will not bother.

Late fees and what you can legally charge

A late fee is only enforceable if the client agreed to it before the debt arose — which is why it belongs in your contract and on every invoice, not in an angry email afterwards. What you may charge depends on where you and your client are.

General position in major markets. Rates and thresholds change — confirm the current figures before relying on them.

Market	Common contractual rate	Statutory fallback where no rate is agreed
United Kingdom	1.5% per month	Bank of England base rate + 8%, plus fixed compensation of £40 / £70 / £100 depending on debt size, under the Late Payment of Commercial Debts (Interest) Act 1998
European Union	1–1.5% per month	At least 8 percentage points above the ECB reference rate, plus a minimum of €40 recovery costs, under the Late Payment Directive
United States	1–1.5% per month (12–18% a year)	No federal rule; several states cap the maximum rate, so check your state before setting one
Australia	~10% a year, or the contract rate	Set by contract; general debt-recovery rules otherwise apply
Canada	1–2% per month	Set by contract; rates above 60% a year are a criminal offence

This is general information, not legal advice. Rates, thresholds and statutory entitlements change, and the rules that apply depend on the contract and jurisdiction — take advice before relying on a specific figure.

In practice a modest, clearly-stated fee works better than a punitive one. 1.5% per month is widely recognised, rarely disputed, and enough to make an invoice worth prioritising. When a fee does become payable, our late fee calculator works out the exact amount owed so your follow-up can quote a number rather than a threat.

There is a lot more to this than one table: flat fees versus interest, the legal caps that catch people out, how to word the clause, and how to claim statutory interest when you never agreed a rate. Our full guide to invoice late fees covers all of it.

Enforcing terms when a client ignores them

Chasing works when it is systematic and unemotional. The sequence below escalates predictably, so you are never deciding in the moment what to say.

When	Action	Tone
3 days before due	Short reminder that the invoice falls due shortly	Helpful
Day 1 overdue	Note it has passed the due date; re-attach the invoice	Neutral, assume an oversight
Day 7	Ask directly for a payment date; offer to resolve any problem with the invoice	Direct
Day 14	Apply the late fee and reissue with the fee itemised	Formal
Day 30	Final notice, with a deadline and a statement of what follows	Formal, specific
Day 45+	Pause further work; consider a collections agency or small claims	Procedural

Two pieces of wording cover most of that sequence. If an invoice gets past day 45, our guide to overdue invoices covers formal demands, small claims and collections.

Day 7 — asking for a payment date

Subject: Invoice [INV-2026-014] — now 7 days overdue

Hi [name],

Invoice [INV-2026-014] for [1,500.00] was due on [15 October] and is currently 7 days overdue. I have attached it again for convenience.

Could you confirm the date payment will be made? If there is a problem with the invoice, or if it needs a purchase order number I have not included, let me know and I will correct and reissue it today.

Thanks,
[your name]

Asking for a date, and offering to fix an invoicing problem, resolves most genuine delays — missing PO numbers are a common cause.

Day 30 — final notice

Subject: Final notice — invoice [INV-2026-014], [1,545.00] now due

Hi [name],

Invoice [INV-2026-014] was due on [15 October] and remains unpaid 30 days later. In line with the payment terms on the invoice and in our agreement dated [date], late payment interest of [1.5%] per month has been applied, bringing the balance to [1,545.00].

Please arrange payment by [date, 7 days out]. If payment is not received by then, I will pause work on [project] and refer the balance for collection.

I would much rather resolve this directly — if there is something preventing payment, tell me and we will find a way through it.

[your name]

Cite the agreement, state the deadline as a date, and name the specific consequence. Vague threats get ignored; specific ones get paid.

Seven mistakes that delay payment

Writing "Net 30" with no date. Always state the actual due date alongside the term.
Terms in the contract but not on the invoice. The person paying rarely has the contract open. Repeat the terms every time.
No late fee stated. Without one there is no cost to paying you last, and someone always gets paid last.
Different terms on different invoices. Inconsistency signals that terms are negotiable after the fact.
Invoicing late. An invoice sent two weeks after delivery has already spent two weeks of your terms. Invoice on completion.
Missing payment details or a PO number. Both are silent blockers — the invoice sits in a queue and nobody tells you.
Never following up. Terms you do not enforce are not terms; they are suggestions.

Most of these are fixed once by setting up your invoice template properly rather than repeatedly by remembering. Our guide to what to include in an invoice covers the full checklist, and how to send invoices covers the delivery and follow-up side.

The short version

Agree terms before the work, restate them on every invoice.
Give a real due date, not just a code.
Default to Net 14; take a deposit on anything large.
State a late fee of around 1.5% per month, and actually apply it.
Follow a fixed chase sequence rather than deciding case by case.

Frequently asked questions

What are the most common invoice payment terms?

Net 30 is the most common in business-to-business invoicing, followed by Net 15 and Due on Receipt. Freelancers and small studios typically use Net 7 to Net 15, while large corporations and public bodies often impose Net 30 to Net 60 as a matter of policy.

When does the payment clock start — the invoice date or the delivery date?

Unless you state otherwise, net terms run from the invoice date, not the date the client opens or acknowledges it. This is why sending the invoice promptly matters: every day you delay issuing it is a day removed from your own payment window.

What payment terms should a freelancer use?

Net 14 is a sensible default: short enough to protect cash flow, long enough that no reasonable client objects. Ask for payment in advance or a 50% deposit from first-time clients, and reserve Net 30 for corporate clients whose payment runs genuinely require it.

Can I charge a late fee on an overdue invoice?

Generally yes, provided the client agreed to it before the debt arose — which means having it in your contract and on the invoice itself. A common contractual rate is 1.5% per month. Several jurisdictions also give you a statutory entitlement to interest and fixed recovery costs even without an agreed rate, but the specifics vary, so check the rules that apply to you.

What does 2/10 Net 30 mean?

It means the client can deduct 2% if they pay within 10 days, otherwise the full amount is due within 30 days. It is an effective way to accelerate cash, but expensive: a 2% discount for 20 days early works out at roughly 37% on an annualised basis.

What is the difference between Net 30 and EOM?

Net 30 is 30 days from the invoice date, so the due date moves with each invoice. EOM means end of month, so everything issued in a given month is due at that month reference point regardless of issue date. EOM suits clients who pay in monthly batches, but an invoice issued on the 28th gets a very short window.

Should I ask for a deposit?

For any project large enough that non-payment would genuinely hurt, yes. A 50% deposit moves money before you incur delivery costs rather than after, which does more for cash flow than shortening net terms. It is standard practice and rarely refused by clients who intend to pay.

A client says their policy is Net 60 and will not negotiate. What can I do?

With large organisations this is often genuinely fixed. Your options are to price the delay in, take a deposit or stage payments so you are not carrying the full amount for 60 days, offer a small early payment discount, or invoice at milestones rather than on completion. Accepting Net 60 on a fully-delivered project with no deposit is the version to avoid.

Do payment terms need to be on the invoice if they are already in the contract?

Yes. The person processing the payment usually does not have the contract in front of them. Terms in the contract make them enforceable; terms on the invoice make them actionable. You want both.

How long should I wait before chasing an overdue invoice?

Send a short reminder about three days before the due date, and follow up the day after it passes. Waiting a week or two signals that your due dates are soft. A fixed sequence — reminder, overdue notice, request for a payment date, late fee, final notice — works better than deciding case by case.

How do I add payment terms in Zap Bill?

Set your default terms and late fee wording in your profile so every new invoice carries them automatically, and override them per invoice where a client requires something different. The due date is calculated for you from the term you select, so the invoice always shows a real date.

Put this guide to work

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