Invoice Payment Terms Explained

What payment terms are

Payment terms tell your client exactly when payment is due. They remove any ambiguity — instead of a vague expectation, your client has a specific date to work toward. The free invoice generator lets you pick your terms from a dropdown and calculates the due date for you.

Due on receipt

Payment is expected immediately, as soon as the client receives the invoice. This is common for smaller jobs, one-off work, or new clients you don't have a payment history with yet.

Net 15, Net 30, Net 60

The number represents days after the invoice date. Net 15 means payment is due 15 days later, Net 30 means 30 days later, and so on. Net 30 is the most common default in B2B work, particularly with agencies and larger companies that process payments on a monthly cycle.

Other terms you'll see

A few less common formats come up often enough to know: EOM (End of Month) sets the due date at the end of the invoice's month rather than counting days from the invoice date — common with suppliers billing on a fixed monthly cycle. 2/10 Net 30 is an early payment discount: 2% off if paid within 10 days, full amount due by day 30 — worth offering if getting paid faster matters more to you than the margin. CIA or PIA (cash or payment in advance) means payment upfront, before work begins — common with new clients, custom materials, or large projects you don't want to carry the cost of until completion.

Custom terms

Sometimes neither a fixed "due on receipt" nor a standard Net period fits — for example, payment tied to a specific milestone or a date you've agreed on directly with the client. A custom due date covers these cases.

What happens if you don't state any terms

In the UK, the law doesn't leave it open-ended: if no payment date is agreed, a business-to-business payment is late 30 days after the customer gets the invoice, or after you deliver the goods or service if that's later. Agreed terms have limits too — they must usually be within 30 days for public authorities or 60 days between businesses, and longer only if it's fair to both (GOV.UK — Late commercial payments). On top of that, the Late Payment of Commercial Debts (Interest) Act 1998 entitles you to statutory interest of 8% plus the Bank of England base rate on overdue B2B invoices, whether or not it was mentioned upfront (GOV.UK — statutory interest rate). In the US, there's no federal equivalent — your stated terms are a contract condition the client agreed to by accepting the invoice, which is exactly why writing them explicitly matters more, not less, without a legal backstop to fall back on.

Payment terms by industry

There's no universal standard, but norms differ enough by industry to be worth knowing before you pick one. Agencies and B2B services default to Net 30 more than anywhere else — it matches how most companies batch-process invoices monthly. Freelance and creative work skews shorter — due on receipt or Net 15 is common, often paired with a deposit upfront for larger projects. Construction and trades frequently use milestone-based terms instead of a flat Net period, tied to phases of the job rather than a single due date — the construction invoice template itemizes labor, materials, change orders and retainage. Wholesale and retail suppliers lean toward Net 60 or longer, since the buyer often needs to resell the goods before they can pay for them. None of these are fixed rules — they're a reasonable starting point if you don't know what to default to.

How to choose

Shorter terms (due on receipt, Net 15) protect your cash flow and make sense for new or smaller clients. Longer terms (Net 30, Net 60) are often expected by larger companies with fixed payment cycles, and can be a reasonable trade-off for landing bigger, more reliable work. Whatever you choose, put it on every invoice — the invoice generator has a payment terms field built in, or see our Net 30 guide for more on the most common term.

Ready to put terms on your own invoice? How to make an invoice covers the full process, see what is an invoice for the legal fields UK and US invoices need, or how to invoice as a freelancer if you're setting terms for the first time.