Invoice Payment Terms Explained: Net 30, Net 15, Due on Receipt & More

Here are the most common invoice payment terms:

Due on Receipt Payment expected immediately when the invoice is received. Best for small amounts or one-time clients.

Net 15 Payment due within 15 days of the invoice date. Popular with freelancers who need faster cash flow.

Net 30 Payment due within 30 days. Standard for business-to-business transactions. Most corporate clients expect Net 30.

Net 45 / Net 60 Payment due within 45 or 60 days. Common with large enterprises. Longer terms tie up your cash flow.

2/10 Net 30 2% discount if paid within 10 days, otherwise full amount due in 30 days. Incentivizes early payment.

50% Deposit Half the project cost upfront, remainder due on completion. Protects you on large projects.

Which terms should you use? Consider these factors:

New Clients → Stricter Terms ✓ Net 15 or Due on Receipt ✓ 50% deposit for projects over $1,000 ✓ Credit card payment preferred

Established Clients → Standard Terms ✓ Net 30 is acceptable ✓ Net 15 if they've paid late before ✓ Offer early payment discount

Enterprise Clients → Negotiated Terms ✓ May require Net 45 or Net 60 ✓ Negotiate shorter terms if possible ✓ Factor into your pricing (longer terms = higher rate)

Quick Rule of Thumb: Freelancers: Net 15 Small businesses: Net 30 Enterprises: Net 30-60 (price accordingly)

Payment terms directly impact when you get paid:

Example: $5,000 invoice sent January 1st

| Terms | Payment Due | Days Waiting | |-------|-------------|--------------| | Due on Receipt | January 1 | 0 days | | Net 15 | January 16 | 15 days | | Net 30 | January 31 | 30 days | | Net 60 | March 2 | 60 days |

If you invoice $10,000/month with Net 60 terms, you're always carrying $20,000 in unpaid invoices. That's a lot of cash tied up!

Cash Flow Tips: ✓ Shorter terms = better cash flow ✓ Build payment terms into your contract before work begins ✓ Charge more for longer payment terms (price in the wait)

Be crystal clear about payment terms on every invoice:

Good Examples: ✓ "Payment due within 15 days of invoice date" ✓ "Due: January 24, 2026 (Net 15)" ✓ "2% discount if paid by January 11, otherwise due January 31" ✓ "50% deposit due before work begins; balance due on completion"

Avoid Vague Terms: ✗ "Due when convenient" ✗ "Payment expected soon" ✗ "Due upon receipt" (what's "receipt"?)

✓ Always include a specific date or number of days.