Payment terms are the single sentence on your invoice that says when the money is due. Get them right and clients pay on schedule. Leave them vague and every invoice becomes a negotiation. Here is what each common term means and when to use it.
The standard terms, decoded
- Due on Receipt. Payable as soon as the invoice lands. Standard for freelancers and small jobs where the work is already delivered.
- Net 7 / Net 15. Payment due 7 or 15 days after the invoice date. Common for small businesses that want speed without sounding abrupt.
- Net 30. Payment due 30 days after the invoice date. The default in B2B, because larger companies run monthly payment runs.
- Net 60 / Net 90. Only when the client asks and the contract allows it. These terms are a loan to the client, priced like one.
Write the term as "Net 30" plus the calendar date it falls on. "Net 30 (due September 12)" removes the math and the excuses.
Which terms to use with which client
New clients: Due on Receipt or Net 7 until they prove they pay. Repeat clients with clean history: Net 15 or Net 30. Enterprise clients: expect Net 30 to Net 60 regardless of what you put on the invoice, so factor that into your pricing and cash flow instead of fighting it.
Where terms go on the invoice
Put the payment terms in the summary area, next to the total, not buried in the fine print. A visible due date gets paid sooner than an elegant one no one reads. Pair the terms with payment instructions: account details, a payment link, or "Pay online at the link above".
Late fees and early payment discounts
Two levers sit on either side of the due date. A late fee (commonly 1.5% per month) pushes clients to pay on time; a small early payment discount (2% off if paid within 10 days, written as "2/10 Net 30") pulls them even earlier. State both on the invoice before the work starts, not after the payment is late. See our guide on charging a late fee for the mechanics.
Build the invoice with the terms already in place using the free invoice generator.