Net 30 vs Net 15 vs Due Upon Receipt: Payment Terms Explained for Freelancers

If you've ever wondered what "Net 30" means on an invoice, or why some invoices say "2/10 Net 30," you're not alone. Payment terms can be confusing, especially when you're just starting out as a freelancer.

But understanding payment terms isn't just about knowing the jargon—it's about cash flow. The terms you set directly impact when money hits your bank account. Choose poorly, and you could wait months to get paid. Choose wisely, and you can dramatically improve your financial situation.

Let's break down every payment term you need to know and when to use each one.

Common Payment Terms Explained

Net 30

Meaning: Payment is due 30 days from the invoice date.

Example: Invoice dated January 1st → Payment due January 31st

When to Use:

• Established clients with good payment history
• Corporate clients with formal AP processes
• Large projects where 30 days is reasonable
• When the client specifically requires it

Pros:

• Industry standard for B2B
• Clients are familiar with it
• Gives clients flexibility

Cons:

• You wait a full month (at best)
• Often stretches to 45-60 days in reality
• Hurts cash flow for freelancers

Reality Check: "Net 30" often means "around 45 days." Studies show the average Net 30 invoice is paid in 45 days. Factor this into your planning.

Net 15

Meaning: Payment is due 15 days from the invoice date.

Example: Invoice dated January 1st → Payment due January 16th

When to Use:

• Smaller projects ($500-$5,000)
• Ongoing client relationships
• When you need faster cash flow
• As a new default (instead of Net 30)

Pros:

• Gets you paid twice as fast
• Still professional and reasonable
• Most clients can accommodate this

Cons:

• Some corporate clients may push back
• Requires more frequent payment processing

Pro Tip: Net 15 is becoming the new standard for freelancers. Most clients can pay in 15 days just as easily as 30—they just need to be asked.

Due Upon Receipt (Net 0)

Meaning: Payment is expected immediately when the invoice is received.

Example: Invoice sent → Payment expected same day

When to Use:

• Small projects under $1,000
• New or unproven clients
• Rush or emergency work
• Final project payments
• When you've been burned before

Pros:

• Fastest payment option
• Sets expectation of immediacy
• Reduces risk with new clients

Cons:

• Some clients view it as pushy
• May not be realistic for large amounts
• Corporate clients often can't comply

Reality Check: "Due upon receipt" typically translates to 7-10 days in practice. Still much faster than Net 30.

Net 7

Meaning: Payment due within 7 days.

Example: Invoice dated January 1st → Payment due January 8th

When to Use:

• Quickdelivery projects
• Retainer-based clients
• When due upon receipt feels too aggressive
• High-trust client relationships

Pros:

• Very fast turnaround
• Feels less demanding than "due upon receipt"
• Good compromise for quick projects

Cons:

• May not work for formal corporate processes
• Requires prompt invoice delivery

Net 60 and Net 90

Meaning: Payment due in 60 or 90 days.

Example: Invoice dated January 1st → Payment due March 1st (Net 60)

When to Use:

• Large enterprise clients that require it
• Government contracts
• Very large project amounts
• When compensated by higher rates

Pros:

• Required to work with certain clients
• Can be negotiated with higher rates

Cons:

• Terrible for cash flow
• Extended risk period
• Should generally be avoided

Important: If a client requires Net 60 or Net 90, negotiate a higher rate (10-20% more) to compensate for the delayed payment and increased risk.

Discount Payment Terms

2/10 Net 30

Meaning: 2% discount if paid within 10 days, otherwise full amount due in 30 days.

Read as: "Two-ten, net thirty"

Example: $1,000 invoice → $980 if paid within 10 days, $1,000 if paid days 11-30

When to Use:

• Larger invoices where 2% is meaningful
• Clients you want to incentivize to pay fast
• When you prioritize cash flow over maximum revenue

Pros:

• Incentivizes early payment
• Client feels they're getting a deal
• Improves your cash flow
• Classic B2B technique

Cons:

• You earn slightly less on discounted payments
• Some clients will take the discount and still pay late
• Adds complexity to invoicing

Math Behind It: That 2% discount for 20 days early is equivalent to a 36.7% annual return. Smart businesses take this deal every time.

1/10 Net 30

Meaning: 1% discount if paid within 10 days, otherwise full amount due in 30 days.

Similar to 2/10 Net 30, but with a smaller discount. Use when you want to incentivize early payment but the 2% feels too generous.

5/10 Net 30

Meaning: 5% discount if paid within 10 days.

More aggressive discount, but can be very effective for large invoices or when you urgently need the cash.

Less Common Terms

End of Month (EOM)

Meaning: Payment due at the end of the month the invoice is received.

Example: Invoice dated January 15th → Payment due January 31st

Note: Be careful with EOM—invoices sent on the 1st get 30 days, but invoices sent on the 28th get only 3 days. Some interpret EOM as end of the following month.

15th and 30th (Semi-Monthly)

Meaning: Client pays on set dates (15th and 30th of each month).

Example: Invoice sent January 5th → Paid on January 15th

When to Use:

• Ongoing retainer clients
• When client has fixed payment processing days

Pros:

• Predictable payment schedule
• Easy to plan cash flow

Cons:

• You're adapting to their schedule
• Wait times vary based on invoice timing

Upon Completion

Meaning: Payment due when the project/milestone is complete.

Example: Website goes live → Invoice is due

When to Use:

• Milestone-based projects
• When completion is a clear, defined event
• For the final payment in a multi-payment project

Pros:

• Clear trigger for payment
• Ties payment to value delivered

Cons:

• "Completion" can be debated
• Projects can drag on
• Doesn't specify how many days after completion

Better Version: "Due upon completion, Net 7" clarifies that payment should come within 7 days of completion.

Retainer Terms

For ongoing client relationships:

Monthly Retainer (Due 1st): Pay on the 1st of each month for that month's work.

Monthly Retainer (Due end of month): Pay at the end of each month for work completed.

Prepaid Retainer: Pay at the start of each period before work begins.

Prepaid is ideal—you're never working "on credit."

Comparing Payment Terms: What the Data Says

Based on industry studies and real-world payment data:

Key Insight: Every payment term runs late. Build buffer into your expectations.

How to Choose the Right Payment Terms

Consider Your Cash Flow Needs

If you:

• Have savings/buffer → Longer terms are okay
• Live invoice to invoice → Shorter terms are essential
• Have ongoing expenses → Predictable payment timing matters

Consider the Client

New clients: Shorter terms (Net 15 or less) + upfront deposit Established clients: Can extend to Net 30 if history is good Corporate clients: May require Net 30, negotiate for Net 15 Enterprise clients: May require Net 60/90, charge premium rates

Consider the Project Size

Small projects (under $1,000): Due upon receipt Medium projects ($1,000-$5,000): Net 15 Large projects ($5,000+): Milestone payments with Net 15 each Enterprise projects ($25,000+): Milestone payments, potentially Net 30

Consider Your Leverage

If you're in high demand:

• Shorter terms
• Larger deposits
• Stricter late fees

If you're building your portfolio:

• May need to accommodate longer terms
• But still avoid Net 60/90

How to Communicate Payment Terms

In Your Proposal/Contract

PAYMENT TERMS
 
This project requires a 50% deposit ($2,500) before work begins.
 
The remaining 50% ($2,500) is due upon project completion,
payable within 15 days of final delivery (Net 15).
 
Payment accepted via credit card, ACH, or wire transfer.
A 1.5% monthly late fee applies to overdue invoices.

On Your Invoice

Clear placement matters:

INVOICE #2026-001
 
Due Date: January 15, 2026
Payment Terms: Net 15
 
...
 
TOTAL DUE: $2,500
DUE BY: January 15, 2026
 
Payment Link: [link]

Verbally

When discussing terms with a client:

"For this project, I require 50% upfront and the remaining 50% is due within 15 days of completion. Does that work for your process?"

Negotiating Payment Terms

When Client Wants Longer Terms

Client: "We only pay Net 60."

Response Options:

1. Rate Adjustment: "I can accommodate Net 60 with a 15% rate increase to account for the extended payment timeline."

2. Larger Deposit: "Net 60 is fine for the final payment if we increase the upfront deposit to 75%."

3. Early Payment Discount: "I can offer 2/10 Net 60—a 2% discount if paid within 10 days."

4. Polite Decline: "Unfortunately, Net 60 doesn't work for my business model. I can offer Net 30 at most."

When You Want Shorter Terms

You: "My standard terms are Net 15 with a 50% deposit."

Client: "Our accounting processes monthly."

Response: "I understand. Would it work to process my invoices on the 15th of each month? That way, we get predictable timing that works for both of us."

Late Payment Fees

Payment terms should include consequences for late payment:

Standard Late Fee: 1.5% per month (18% annually) Alternative: Fixed fee per occurrence ($25-50) Interest Approach: Prime rate + 5%

Example terms:

Payment Terms: Net 15
Late Fee: A 1.5% monthly fee applies to invoices not paid
within 15 days of the due date.

Important: State late fees in your contract AND on invoices, or they may not be enforceable.

Payment Terms by Industry

Web Development

• Standard: Net 15 with 50% deposit
• Enterprise: Net 30 with milestone payments
• Small projects: Due upon receipt

Graphic Design

• Standard: Net 15 with 50% deposit
• Rush work: Due upon receipt + rush fee
• Revisions: Due upon final approval

Copywriting

• Standard: Net 15 with 50% deposit
• Blogging/content: Monthly retainer, due 1st
• Large projects: Milestone payments

Consulting

• Standard: Net 15
• Retainer: Prepaid monthly
• Per-project: 50% upfront, 50% upon completion

Photography/Video

• Standard: 50% upfront, 50% on delivery (Net 7)
• Events: 100% upfront
• Commercial: Net 15 with 50% deposit

Action Steps

Review Your Current Terms

Are you using Net 30 by default? Consider switching to Net 15.

Add Early Payment Discounts

Try "2/10 Net 15" to incentivize faster payment.

Require Deposits

New clients should pay 50% upfront, no exceptions.

State Terms Clearly

Every invoice should have due date prominently displayed.

Track Payment Times

Know your average days-to-payment by client and adjust terms accordingly.

Conclusion

Payment terms aren't just fine print—they're cash flow strategy. The right terms get you paid faster, reduce risk, and give you more financial stability.

For most freelancers, here's the ideal approach:

• Default: Net 15 with 50% deposit
• New clients: Due upon receipt for first project
• Large projects: Milestone payments
• Enterprise: Net 30 maximum, with rate premium

Don't accept Net 30 just because "that's how it's done." You have the power to set terms that work for your business.

Clear payment terms deserve professional invoices. Quidbill makes it easy to set your terms, add one-click payment links, and get paid faster. Try it free—create your first invoice in 30 seconds.

Start Invoicing →