Invoice Payment Terms Explained (Net 30, Net 15, Due Upon Receipt)

When you write "Net 30" at the bottom of an invoice, you're telling your client exactly when payment is due — and giving yourself a defensible position if they pay late. The problem: most freelancers copy whichever term they saw on someone else's invoice, then wonder why payment habits don't match what they wrote.

This guide explains the most common payment terms, what each one actually means, when to use which, and how to write them so they hold up if the conversation ever gets uncomfortable. We'll also cover early-payment discounts, late fees, and what to do when terms get ignored.

What "payment terms" actually means

Payment terms are the rules a seller (you) sets for when and how a buyer must pay. They appear on the invoice itself, ideally also in the underlying contract.

Two parts make up a payment term:

A timeframe — when payment is due
Optional modifiers — discounts for early payment, late fees, accepted methods

The timeframe is the part everyone gets wrong. "Due as soon as possible" is not a payment term. Neither is "Pay when convenient." A real payment term is a specific, calendable timeframe.

The common terms, decoded

Net 30

Meaning: Payment is due 30 days after the invoice issue date.

Example: Invoice issued May 7, 2026 → due June 6, 2026.

When to use: B2B work in the US, especially with corporate clients. This is the cultural default — companies expect Net 30 unless told otherwise.

Watch out: Some clients quietly interpret "Net 30" as "30 business days" instead of calendar days. Specify "30 calendar days" if it matters.

Net 15

Meaning: Payment due 15 days after issue date.

Example: Invoice May 7 → due May 22.

When to use: Smaller invoices, faster-paying clients, or when you need cash flow tighter than monthly. Common with freelancers who can't float receivables for a full month.

Net 60 / Net 90

Meaning: 60 or 90 days after issue date.

Watch out: Large enterprises will demand Net 60 or even Net 90 as standard. You can negotiate, but be prepared to walk if the cash flow doesn't work for you. Net 90 essentially means you're loaning the client free money for three months.

Due Upon Receipt

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

Realistic interpretation: Within 3-7 business days. "Immediately" rarely means immediately when an AP team is involved.

When to use: New clients you don't have a relationship with yet, small one-off jobs, or final invoices on a project. We have a full guide to "due upon receipt".

EOM (End of Month)

Meaning: Payment is due at the end of the month in which the invoice was issued.

Example: Invoice May 7 → due May 31.

Watch out: Clients ignore this one frequently. Cleaner to write a specific date.

COD (Cash on Delivery)

Meaning: Payment is due at the moment of delivery.

When to use: Physical goods sold to walk-up customers. Almost never relevant for freelance services.

CIA (Cash in Advance) / Prepay

Meaning: Payment is due before work begins.

When to use: New clients with no track record, jobs requiring you to buy materials upfront, or when your gut says "this client might ghost." Often expressed as a 50% deposit + 50% on completion.

2/10 Net 30 (early payment discount)

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

Example: $1,000 invoice issued May 7 — pay $980 by May 17, or $1,000 by June 6.

When to use: When you'd rather get 98% of the cash now than 100% in a month. Effective annual interest rate of ~37%, which is why some clients use it religiously.

Which term should you pick?

Match the term to the relationship:

| Situation | Recommended term | |---|---| | New client, first project, small | Due upon receipt or 50% deposit + 50% Net 15 | | New client, first project, larger | 50% deposit + 50% Net 30 | | Established client, ongoing work | Net 15 to Net 30 | | Corporate B2B client | Net 30 (their default) | | Client with payment issues | Due upon receipt + late fee clause | | Recurring monthly retainer | Net 15 from each month-start | | Project milestone billing | Net 15 from each milestone |

Avoid mixing. If you set Net 30 for one invoice and Due Upon Receipt for the next, the client gets confused and slows down their payment process while their AP team figures out which is "current."

Writing payment terms on the invoice

Where on the invoice they go matters:

Top: "Payment Terms: Net 30" near the issue date / due date block. Most prominent.
Bottom: "Payment Terms" footer line. Less visible, more often ignored.
Both: Specify due date in the header (Due: June 6, 2026) AND payment term in a footer line (Net 30 from issue date. Late payments subject to a 1.5% monthly fee.)

The "both" approach is best. Specific due date in the header makes it obvious what date matters; the footer line establishes your terms in case of dispute.

Late fees

You can charge a late fee if you've established the right to do so before the invoice is past due.

How to establish it

The cleanest way: include a clause in your contract. Example:

Invoices unpaid past their due date are subject to a late fee of 1.5% per month (or the maximum allowed by state law, whichever is lower).

If you don't have a contract, the next-best is to put the late fee policy on every invoice in the footer. A client who pays a few invoices without protest has implicitly accepted the terms.

Typical late fee rates

1-2% per month (i.e., 12-24% annualized) — most common in B2B freelance
$25-$50 flat fee — sometimes added on top, sometimes instead of percentage
State maximums — most states cap unsecured commercial interest at 12-18% annualized; check your state law before exceeding

Enforcement reality

Late fees are mostly a deterrent. Whether you actually collect them depends on the client. Larger clients ignore them. Smaller clients sometimes pay them out of guilt. Don't budget for late fees as income.

Early payment discounts

The flip side of late fees. You give a small discount in exchange for getting paid faster.

When they're worth offering

You have cash flow pressure — a discount is cheaper than a small business loan
You work with corporate clients who use AP automation that auto-takes early payment discounts (some Fortune 500 companies do this systematically)
Your work has thin enough margins that the discount cost is acceptable

When they're not worth it

You don't actually need the cash sooner
Your clients pay reliably anyway (you're giving up margin for no benefit)
You can't afford a 2% margin cut

Common formats

2/10 Net 30 — 2% off if paid in 10 days, otherwise full amount in 30
1/15 Net 30 — 1% off if paid in 15 days
Custom: "5% discount if paid within 5 days of receipt" — works the same way

Bank details

Payment terms are useless if the client can't actually pay you. Always include payment instructions on the invoice.

For US domestic clients

Include the basics for ACH:

Bank name
Account holder name (must match your business name on the invoice)
Account number
Routing number (9 digits)

ACH is the standard. Wire transfers exist but cost the client $25-$30 each — only use if speed matters.

For international clients

Include SWIFT/BIC code in addition to the above. International transfers cost $30-$50 in bank fees. For larger invoices, services like Wise or Payoneer can save 50-80% on FX fees compared to direct bank wires.

Card payments

Stripe, Square, PayPal, Wise — all let you accept cards. Costs you 2.9% + $0.30 per transaction. Reasonable for invoices under $1,000 where the friction of bank transfer is the bottleneck.

What never to put on an invoice

Your bank login
Your debit card number
Anything beyond what's needed to receive money

What to do when terms get ignored

Even with clear terms, ~10-15% of B2B invoices pay late. The cadence:

Day 1 past due: Polite reminder. "Hi, just confirming you received invoice #024 due yesterday."
Day 7-14: Firmer follow-up. Reference your terms explicitly.
Day 21: Phone call (if you can). Email gets ignored; voice doesn't.
Day 30: Stop new work. Don't deliver the next milestone until the current invoice is paid.
Day 60+: Small claims court (under $5K-$10K depending on state) or a collections agency.

Full playbook in our unpaid invoice follow-up guide.

FAQ

What's the most common invoice payment term?

In the US, Net 30 is the standard for B2B work. New clients and smaller invoices often use Net 15 or Due Upon Receipt.

Can I change payment terms mid-project?

You can propose a change, but the client has to agree. Sending an invoice with new terms and expecting them to be accepted automatically is risky — they can refuse and stick to the original terms. Negotiate first, then update the invoice.

Are payment terms legally binding?

If both parties agreed (in writing or by performance), yes. The terms on the invoice become enforceable when the client accepts the invoice without objection — silence + acceptance of work = implicit agreement.

Is "Net 30" 30 calendar days or 30 business days?

Default is calendar days unless specified. To avoid confusion, write Net 30 (calendar days) or specify a literal due date: Due June 6, 2026.

What happens if I don't put any payment terms on an invoice?

Default in most US jurisdictions is "due upon receipt" or within a "reasonable time" (interpreted as ~30 days). You lose the ability to charge late fees. You also lose the ability to argue for a specific due date in court. Always specify terms.

Can I require deposits before starting work?

Yes. A common setup is 50% deposit (CIA) + 50% on completion (Net 15). Especially smart for new clients or large projects. We cover this pattern in our proforma invoice guide.

What's the difference between Net 30 and EOM Net 30?

Net 30 = 30 days from issue date. EOM Net 30 = 30 days from the end of the month the invoice was issued. So an invoice issued May 7 with Net 30 is due June 6; with EOM Net 30 it's due June 30. EOM Net 30 effectively gives the client up to 60 days.

Can I charge interest on overdue invoices?

Yes, if you've established the right to do so before the due date passed (via contract or stated invoice terms). Most states cap commercial interest at 12-18% annualized. Federal interest preemption doesn't usually apply between businesses.