Invoice Payment Terms: Due on Receipt, Net 14 or Net 30, and How to Choose

Open the free invoice generatorDownload the payment terms cheat sheet (PDF)

What the common terms mean

Due on receipt means the client should pay as soon as they get the invoice. In practice it means "now, please", and most people pay within a few days. It suits one-off work for private clients, who pay from their own account and do not have an approval process.

Net 7, net 14, net 30 mean the invoice is due 7, 14 or 30 days after the invoice date. Net 30 is common between businesses because many companies pay suppliers in a monthly run; an invoice that arrives just after the run waits for the next one.

Net 45 and net 60 are what large companies sometimes ask for. They are a loan from you to your client, so agree to them only when the work is worth it, and price the wait in.

Deposit and balance splits the payment: part before you start, the rest when you finish. It is the norm for large jobs and anything where you buy materials up front; our guide to deposit invoices covers how to show it.

What happens when no date is agreed

If you send an invoice with no terms at all, you are relying on the law or the client's habits. In the UK, the government's page on late commercial payments says that when no payment date has been agreed, a payment between businesses is late 30 days after the customer receives the invoice or you deliver the goods or service, whichever is later. After that you may be able to claim interest and debt recovery costs.

In the US there is no general rule like that for private businesses, but the federal government holds itself to one. The Treasury's page on the Prompt Payment Act explains that agencies must pay a proper invoice on time and, in most cases, pay interest when they pay late. It is a useful benchmark: even the government accepts that a due date means something.

The lesson in both cases is the same. Do not leave the date to the law. Agree the terms before you start, and print them on the invoice.

How to choose terms for each client

• A private client, one job: due on receipt, or on completion. There is no accounts department to wait for.
• A small business you work with often: 7 or 14 days. Short enough to keep your cash moving, long enough to be fair.
• A company with an accounts department: ask how they pay suppliers before you quote. If they pay monthly, 30 days that lands before their run beats 14 days that misses it.
• A large job: a deposit before you start and the balance on completion, so you are never owed more than you can afford to lose.

Late fees are a separate decision. If you charge one, say so in the quote and on the invoice, and work out the amount with the free invoice late fee calculator, which handles a flat fee, a percentage or daily interest.

Step by step: setting terms in the free generator

1. Agree terms before the work

Put the terms in your quote; the free estimate maker has a terms box for it. An invoice that confirms what was agreed is paid faster than one that announces new terms.

2. Pick the terms for this client

Use the list above, and write your defaults on the cheat sheet with this guide so you do not decide from scratch each time.

3. Set the due date

In the free invoice generator, Payment due offers On receipt, In 7, 14, 15, 30, 45 or 60 days, or On a date I pick. The invoice shows the exact due date worked out from the invoice date, or "On receipt".

4. Word the terms box

In Payment terms and how to pay, write the due date again, how to pay, and any late fee: "Payment due by October 31, 2026. Bank transfer to [details], quoting invoice INV-0042. A late fee of 2% applies after the due date." The generator remembers it for your next invoice.

5. Send it the day the work is done

The clock starts when the client receives the invoice, so every day you wait to send it is a day added to your terms.

Early payment discounts, explained

You will sometimes see terms like "2/10 net 30". It means the full amount is due in 30 days, but the client may take 2% off if they pay within 10 days. It is a way of buying faster payment, and it is expensive: giving up 2% to be paid 20 days sooner is a high price for most small businesses, so use it only if cash today is worth that much to you.

If you offer one, write it out in full in the terms box rather than relying on the shorthand, for example "2% discount if paid by October 11; full amount due by October 31". VAT-registered businesses in the UK should note that HMRC's VAT guide lists the rate of any cash discount offered among the details a VAT invoice must show.

The opposite tool, a late fee, works better for most small businesses: the price stays the same for everyone who pays on time, and only late payers pay more.

Making the due date enforce itself

Terms only work if someone notices when a date passes. With a PDF, that someone is you. In Fynl the invoice goes out as a payment link, reminders are sent on their own a set number of days before and after the due date and stop when the invoice is paid, and late fees can be added automatically. The Starter plan is $49 a month.

For what else to put on the invoice, read how to make an invoice for freelance work. Every free tool is on one page.

Questions people also ask

Sources

• GOV.UK — Late commercial payments: charging interest and debt recovery
• Bureau of the Fiscal Service — Prompt Payment
• GOV.UK — Invoices: what they must include