Invoice Maker › Invoice Tips › Invoice Payment Terms Explained
Invoice Payment Terms Explained
Net 30, 2/10 Net 30, EOM… here's what all those terms mean and which ones to use.
Payment terms tell your client when they need to pay you. Picking clear terms, and putting them on every invoice, is one of the easiest ways to get paid on time.
Common payment terms
| Term | What it means |
|---|---|
| Due on receipt | Pay as soon as you get the invoice. Common for small jobs and consumers. |
| Net 7 / Net 14 / Net 15 | Payment due 7, 14 or 15 days after the invoice date. |
| Net 30 | Payment due 30 days after the invoice date. The most common business term. |
| Net 45 / Net 60 / Net 90 | Longer terms, usually asked for by large companies. |
| EOM | "End of month": due at the end of the month the invoice was issued. |
| Net 10 EOM | Due 10 days after the end of the month. |
| 2/10 Net 30 | A 2% discount if paid within 10 days, otherwise the full amount is due in 30 days. |
| CIA / CWO | Cash in advance / cash with order: pay before the work starts or the goods ship. |
| COD | Cash on delivery: pay when the goods or service are delivered. |
| 50% upfront | Half paid as a deposit before work starts, the rest on completion. |
Which terms should you use?
- Consumers and small one-off jobs: due on receipt.
- Freelancers and small businesses: Net 7 to Net 15 keeps cash coming in.
- Business clients: Net 30 is standard, and many companies only pay on their own fixed schedule anyway.
- Big or long projects: ask for a deposit, then bill in stages.
Shorter terms generally mean faster payment, but be realistic. If a client's accounts payable team only runs payments twice a month, "due on receipt" won't change that.
Early payment discounts and late fees
An early payment discount like 2/10 Net 30 can speed things up with clients who watch costs. Late fees work the other way: a common example is 1.5% per month on overdue balances. If you charge late fees, agree to them up front (in your contract or quote), write them on the invoice, and make sure they're allowed where you do business. Some places cap them.
Setting terms in our invoice maker
In the invoice generator, choose your terms from the dropdown and the due date is filled in automatically. Add details like deposits, late fees or discounts in the "Terms & payment info" box.