Invoice Payment Terms Explained: Net 7, Net 15, Net 30
July 2026 · 6 min read
Payment terms tell your client when an invoice is due. Get them wrong and you will wait weeks longer than necessary for your money. Get them right and you will get paid faster, improve cash flow, and spend less time chasing overdue invoices. This guide explains the most common invoice payment terms, what they mean, and how to choose the right ones for your business.
What Are Invoice Payment Terms?
Payment terms are the conditions under which you expect to be paid. They appear on the invoice itself and specify the due date, accepted payment methods, and any discounts or penalties. The most widely used format is "Net X" — where X is the number of days the client has to pay after receiving the invoice.
Common Payment Terms Explained
Net 7
Payment is due within 7 days of the invoice date. Net 7 is aggressive but effective for small invoices and one-off jobs. It works well for freelancers and contractors who want fast turnaround. Some clients may push back on Net 7, but many will simply pay it — the short deadline creates urgency.
Net 15
Payment is due within 15 days. Net 15 is the sweet spot for most freelancers and small businesses. It gives clients enough time to process payment through their accounts team while keeping your cash flow healthy. If you are unsure what terms to set, start with Net 15.
Net 30
Payment is due within 30 days. Net 30 is the corporate default — most large companies expect it and some will not accept anything shorter. The downside is obvious: you wait a full month for payment. If you work with big clients, you may have to accept Net 30, but always pair it with clear follow-up reminders.
Net 45 and Net 60
These longer terms are sometimes demanded by enterprise clients with slow accounts payable processes. Avoid them if you can — they strain your cash flow significantly. If a client insists on Net 60, consider raising your rate to compensate for the delay.
Due on Receipt
Payment is due immediately upon receiving the invoice. This is the most aggressive term and works best for small amounts, retail transactions, or one-off consultations. Use it sparingly with new clients — it can come across as demanding.
Due on Receipt — End of Month (EOM)
Payment is due by the end of the current month. For example, an invoice sent on 5 July with EOM terms is due by 31 July. This is common in B2B billing cycles.
Early Payment Discounts
To encourage faster payment, offer a small discount for early settlement. The standard notation is "X/Y Net Z" — meaning X% discount if paid within Y days, otherwise full amount due in Z days.
- 2/10 Net 30: 2% discount if paid within 10 days, otherwise due in 30 days.
- 1/10 Net 30: 1% discount if paid within 10 days.
A 2% discount costs you very little but can dramatically speed up payment. Many clients have policies to take advantage of early payment discounts.
Which Payment Terms Should You Choose?
| Your Situation | Recommended Terms |
|---|---|
| New freelancer, small jobs | Net 7 or Due on Receipt |
| Established freelancer/small business | Net 15 |
| Working with corporates | Net 30 (expected) |
| Enterprise clients | Net 30–60, negotiate if possible |
| Want faster payment | 2/10 Net 30 (early discount) |
How to Write Payment Terms on Your Invoice
Be explicit. Do not leave the client guessing. Include these elements near the total amount:
- The exact due date (not just "Net 30")
- Accepted payment methods (bank transfer, card, PayPal)
- Your bank details or payment link
- Late payment policy (e.g., "Late payments subject to 1.5% monthly interest")
Our free invoice generator lets you set custom payment terms and due dates — it calculates the exact due date automatically based on the terms you choose.
Late Payment: What to Do
Even with clear terms, some clients pay late. Here is a simple follow-up sequence:
- 3 days before due: Send a polite reminder with the invoice attached.
- 1 day after due: Friendly nudge — "just checking in on invoice INV-001".
- 7 days late: Firmer email referencing your payment terms and late fee policy.
- 14 days late: Phone call and a final written notice.
- 30+ days late: Consider a debt collection service or small claims court.
Related Guides
- How to Write an Invoice: Complete Guide with Examples
- Invoice Numbering Guide: How to Number Invoices Correctly
- Self-Employed Invoice Template: Free Guide for Sole Traders
Summary
Payment terms are one of the most powerful levers you have for getting paid on time. Default to Net 15 for most clients, offer early payment discounts to speed things up, and always state the exact due date on your invoice. Use our free invoice generator to create professional invoices with custom payment terms in seconds.