Invoice Payment Terms: Examples, Meanings and Which to Use

Payment terms tell your customer when to pay and, sometimes, what happens if they don't. They're usually one short line on the invoice, like "Net 30", but that line is doing a lot of work. Pick terms that are too loose and you're lending money to your clients for free. Pick terms that are too tight for their payment cycle and your invoice waits in a pile anyway.

The common terms, decoded

Term	Meaning	Example (invoice dated 1 Sept)
Due on receipt	Pay as soon as you receive it	Due 1 Sept
Net 7 / Net 10 / Net 14	Pay within that many days of the invoice date	Net 14 → due 15 Sept
Net 30	Pay within 30 days	Due 1 Oct
Net 60 / Net 90	Pay within 60 or 90 days	Common with large corporates
EOM	Due at the end of the month the invoice is dated	Due 30 Sept
Net 30 EOM	30 days after the end of the invoice month	Due 30 Oct
15 MFI	15th of the month following the invoice	Due 15 Oct
2/10 Net 30	2% discount if paid within 10 days, otherwise full amount in 30	Pay $980 by 11 Sept or $1,000 by 1 Oct
CIA / CWO	Cash in advance / cash with order	Before work starts
COD	Cash on delivery	When goods arrive
PIA	Payment in advance	Before work starts

"Net" just means the full (net) amount. Net 30 is the default for business-to-business work in the US and common in the UK. We have a whole piece on what Net 30 means in practice.

Days from when?

Almost always from the invoice date, not the date the client opens it. That's one reason to send invoices promptly and date them the day you send them. If you want terms counted from delivery ("30 days from delivery"), write that explicitly.

Write the actual due date on the invoice as well as the term. "Net 30, due 1 October 2026" removes all ambiguity. Nobody has to count days, and nobody can claim they counted differently.

How to choose

A few honest rules of thumb:

Individuals and small clients: short terms. Private customers pay what's in front of them. Due on receipt or Net 7 works well for consumers, tutoring, cleaning, repairs and one-off jobs. See due on receipt.

Small businesses: Net 14 to Net 30. Most small businesses pay invoices in a weekly or fortnightly run. Net 14 is increasingly common for freelancers and is rarely pushed back on.

Large companies: match their cycle. A corporate client may have fixed terms of 45, 60 or even 90 days, and your invoice won't change that. Find out before you quote, build the delay into your price, and consider asking for a deposit.

Long projects: split it up. Don't wait three months to send one big invoice. Use a deposit plus milestones, or monthly progress billing. See deposit invoices and progress billing.

The law may set a ceiling

Some places cap how long businesses can take to pay each other. In the UK, if no terms are agreed, a business customer must pay within 30 days, and the Late Payment of Commercial Debts Act lets you claim statutory interest and compensation after that. In the EU, the Late Payment Directive sets a default of 30 days and a normal maximum of 60 days between businesses unless expressly agreed otherwise and not grossly unfair. The US has no general federal rule for private businesses, though federal agencies are covered by the Prompt Payment Act and some states have their own rules for specific industries such as construction.

Adding teeth: late payment terms

Terms without consequences are suggestions. If you intend to charge for late payment, say so on every invoice:

Payment due within 14 days. Overdue balances incur a late fee of 1.5% per month.

or, for UK B2B:

Payment due within 30 days. We reserve the right to charge interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.

Check what's allowed where you are before charging anything. Our guide to late fees on invoices covers the limits.

Carrots work too

An early payment discount like 2/10 Net 30 can speed things up, but it's expensive: 2% for paying 20 days early works out to an annualized rate of more than 36%. It's worth it if cash flow is tight or a client is chronically slow; it's usually not worth it otherwise. More in early payment discounts.

Example terms you can copy

• Payment is due within 14 days of the invoice date (by 15 September 2026). Please use the invoice number as your payment reference.
• Due on receipt. We accept bank transfer and card payments via the link below.
• 50% deposit due on acceptance of this quote; balance due within 7 days of completion.
• Net 30. A late fee of 1.5% per month applies to balances unpaid after the due date.
• 2/10 Net 30: deduct 2% if paid within 10 days; otherwise the full amount is due within 30 days.

Whatever you choose, agree it before the work starts, put it in your quote or contract, and then repeat it on the invoice. Terms that appear for the first time on an invoice are much easier to argue with.