Invoice payment terms explained

Payment terms tell your customer when the money is due. They are short, but the wrong phrase can cost you weeks: “on completion” and “Net 30 from invoice” describe very different cash flow.

The terms you will see most often

• Due on receipt — payable as soon as the invoice arrives. Common for freelancers and small jobs.
• Net 7 / Net 14 / Net 30 — the full amount is due 7, 14 or 30 days after the invoice date.
• End of month (EOM) — due on the last day of the month the invoice was issued.
• 2/10 net 30 — a 2% discount if paid within 10 days, otherwise the full amount is due in 30.
• 50% upfront, 50% on delivery — a deposit structure for larger projects.

How to choose

Match your terms to your customer's payment cycle. Large companies typically run monthly accounts runs, so an invoice arriving on the 25th may not be reviewed until the next cycle — EOM terms make that explicit. For new customers, shorter terms or a deposit reduce exposure. For regular clients, Net 30 or Net 45 is usually the professional default.

State them in three places

Put the due date in the invoice header, name the terms in the payment section, and repeat them in your notes. Three consistent statements remove the most common excuse for late payment.

What to do when payment is late

Start with a polite reminder on the day after the due date — often the invoice simply landed in the wrong inbox. After a week, resend with the original attached and a clear subject line. Many jurisdictions allow interest on overdue commercial debts, but the clause has to be on the invoice or contract to be enforceable, and rates are regulated. Check local rules before charging anything.