Invoice Payment Terms Explained: Net 30, Due on Receipt and More

Payment terms tell your client when and how they must pay. They are one of the few things on an invoice that directly affect how fast you get your money - and one of the most commonly left out. An invoice without terms is often paid whenever the client's next payment run happens to fall.

This guide explains the common payment terms, what they mean, which ones to use and how to write them so there is no room for misunderstanding.

Common invoice payment terms explained

Term	Meaning
Due on receipt	Payment is due as soon as the invoice is received.
Net 7 / Net 14	Payment is due 7 or 14 days after the invoice date.
Net 30	Payment is due 30 days after the invoice date. The most common business-to-business term.
Net 60 / Net 90	Payment is due 60 or 90 days after the invoice date. Common with large companies.
EOM (end of month)	Payment is due at the end of the month in which the invoice is dated.
Net 30 EOM	Payment is due 30 days after the end of the invoice month.
2/10 Net 30	A 2% discount if paid within 10 days; otherwise the full amount is due in 30 days.
PIA / CIA	Payment in advance / cash in advance - pay before the work starts or goods ship.
COD	Cash on delivery - pay when the goods are delivered.
50% upfront	Half before work starts, the balance on completion.
Stage payments	Payments at agreed milestones, common in construction and larger projects.

What does Net 30 mean?

"Net 30" means the full (net) amount is due 30 calendar days after the invoice date. An invoice dated 1 October on Net 30 terms is due on 31 October. "Net" refers to the total after any discounts already shown on the invoice. Because not every client knows the jargon, it is good practice to print the actual due date as well: "Payment terms: Net 30 - due 31 October 2026".

Which payment terms should you use?

• New or one-off clients: shorter terms (due on receipt, Net 7 or Net 14), or a deposit upfront.
• Established business clients: Net 30 is standard. Large companies may insist on their own terms, often 30 to 60 days - agree this before you start.
• Large or long projects: a deposit and stage payments, so you are not funding months of work yourself.
• Products shipped to new customers: payment in advance or on delivery.
• If cash flow matters more than margin: an early-payment discount such as 2/10 Net 30 can speed things up, but it costs you 2% on every invoice paid early.

Whatever you choose, agree it before the work starts - in your quote or contract - and then repeat it on the invoice. Terms that appear for the first time on the invoice are much harder to enforce.

Late payment fees and interest

You can only charge late fees or interest if they were agreed or are allowed by law. Rules differ by country:

• United Kingdom: under the Late Payment of Commercial Debts (Interest) Act, businesses can claim statutory interest of 8% plus the Bank of England base rate on late business-to-business payments, plus fixed compensation of £40, £70 or £100 depending on the size of the debt. If no payment date was agreed, a payment is generally late 30 days after the customer receives the invoice or the goods or service.
• European Union: the Late Payment Directive sets a default business-to-business payment period of 30 days (and generally no more than 60 unless expressly agreed and not unfair), statutory interest of at least 8 percentage points above the central bank reference rate, and a minimum €40 compensation for recovery costs.
• United States: there is no federal rule; late fees and interest are governed by state law and by your contract. A monthly late fee of around 1% to 1.5% is common, but check your state's limits.

State any late payment terms on the invoice ("Interest will be charged on overdue amounts at the statutory rate"), but remember that the stronger your relationship with the client, the more a polite reminder will achieve compared with a fee. See our overdue invoice email templates for wording.

How to write payment terms on an invoice

Be specific and put the terms near the total. Good examples:

• "Payment due within 14 days of the invoice date (by 15 October 2026)."
• "Net 30 - due 31 October 2026. Please quote invoice 2026-014 as the reference."
• "50% deposit paid on 1 September. Balance of £1,200 due on completion, by 30 September 2026."
• "2% discount if paid by 11 October 2026; otherwise the full amount is due by 31 October 2026."

Next to the terms, include exactly how to pay - bank details, a payment link or a payment QR code.

Tips for getting paid on time

• Invoice the day the work is finished.
• Print a real due date, not just a term.
• Send the invoice to the person who pays, not only the person who commissioned the work.
• Make paying effortless: every payment detail on the invoice, and more than one way to pay if you can.
• Send a friendly reminder a few days before the due date.

The free invoice generator has Net 7, Net 14, Net 30 and Net 60 shortcuts that set the due date for you, plus a notes field for your terms. For everything else on the invoice, see how to write an invoice.

Frequently asked questions

Does Net 30 include weekends?

Yes. Net terms count calendar days, not business days, unless your agreement says otherwise.

When does Net 30 start - the invoice date or the date the client received it?

Conventionally, the invoice date. That is another reason to send invoices promptly and print the due date explicitly.

Can I change payment terms for an existing client?

Yes, but agree the change with them in writing first and apply it to future work, not to invoices already issued.