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

What Are Invoice Payment Terms?

Payment terms are the conditions under which you expect to be paid. They tell your client exactly when payment is due and may include details about early payment discounts or late payment penalties. Getting payment terms right is crucial for maintaining healthy cash flow.

Common Payment Terms Explained

• Due on Receipt (DOR) — Payment is expected as soon as the client receives the invoice. Best for small, one-off jobs or new clients you haven't worked with before.
• Net 7 — Payment due within 7 calendar days of the invoice date. Good for ongoing freelance relationships where you invoice weekly.
• Net 14 — Payment due within 14 days. The most common term for freelancers and small businesses.
• Net 30 — Payment due within 30 days. Standard for corporate clients and agencies. Note: this means you won't see money for a full month.
• Net 60 / Net 90 — Payment due within 60 or 90 days. Typically used by large corporations. Avoid these if possible as they strain cash flow.
• 2/10 Net 30 — Client gets a 2% discount if they pay within 10 days; otherwise full payment is due in 30 days.

Which Payment Terms Should You Use?

The right terms depend on your situation:

• New clients — Use shorter terms (Net 7 or Due on Receipt) until trust is established
• Regular clients — Net 14 is a fair balance between professional and practical
• Corporate clients — They often insist on Net 30; factor this into your pricing
• Large projects — Use milestone payments (50% upfront, 50% on delivery)

How to Get Paid Faster

• Invoice immediately — Don't wait days or weeks after finishing work
• Offer multiple payment methods — Bank transfer, PayPal, card payment
• Send friendly reminders — A polite email 2 days before the due date works wonders
• Charge late fees — Mention them on your invoice (even if you rarely enforce them)
• Use shorter terms — Net 14 instead of Net 30 where possible
• Make it easy to pay — Include clear bank details or a payment link

What to Do About Late Payments

1. Day 1 overdue — Send a gentle reminder email
2. 7 days overdue — Follow up with a phone call or firmer email
3. 14 days overdue — Send a formal late payment notice with interest warning
4. 30+ days overdue — Consider pausing further work until payment is received

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