Invoice Payment Terms Explained: NET 30, NET 15, and More

Payment terms are the line on your invoice that tells the client when to pay. Get them right and you get paid on time; get them wrong and you sponsor your client's business for an extra 60 days.

Below is every common term, what it means, and when to use it. Skip to the "Which to use" section at the end if you just want the recommendation.

NET 30

Means: Payment is due 30 days from the invoice date.

Use when: You are billing a corporate client with a formal AP process. NET 30 is what their system expects — try anything shorter and you may be told to refile.

Reality: Average actual days-to-pay on a NET 30 invoice is 39 days. Plan accordingly.

NET 15

Means: Payment is due 15 days from the invoice date.

Use when: You are billing smaller businesses, agencies, or other freelancers. Most accept NET 15 without comment.

Why it beats NET 30: It cuts your average days-to-pay roughly in half, with the same client acceptance rate.

NET 7

Means: Payment is due 7 days from the invoice date.

Use when: Repeat clients you trust, or smaller invoices where the client can pay from a credit card. Not appropriate for new enterprise clients — too aggressive.

Due on Receipt

Means: Pay immediately.

Use when: Tiny invoices, deposits, one-off services to consumers. Not realistic for B2B.

Caveat: "Due on receipt" without a one-click payment link is theater. Most clients still take a week.

EOM (End of Month)

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

Use when: You bill monthly retainers and the client batches all vendor payments at month-end.

Variant — "Net 30 EOM": Due 30 days after end of month. Effectively NET 30 to NET 60. Avoid if possible.

2/10 NET 30 (early-payment discount)

Means: 2% discount if paid within 10 days, otherwise the full amount is due in 30 days.

Use when: You want to incentivize fast payment from larger clients. The 2% discount you give up is often worth less than the 20+ days you would have waited.

Math: A 2% discount for paying 20 days early is equivalent to a 36% annual return. Most enterprise AP departments calculate this and take the discount.

Late fees and interest clauses

Most US states allow a 1 to 1.5% monthly late fee on overdue B2B invoices. UK statute (Late Payment of Commercial Debts Act) allows base rate + 8% on overdue B2B debts. You must disclose the fee on the invoice and in your contract for it to be enforceable. See how to add late fees legally.

Which to use

• New enterprise client: NET 30 with a 50% deposit upfront.
• SMB / agency client: NET 15.
• Other freelancer or trusted repeat client: NET 7.
• Recurring retainer: EOM with auto-bill.
• One-off small invoice ($500 or less): Due on receipt + one-click payment link.

Then make the terms enforceable: state them on every invoice, in every contract, and apply late fees automatically. Duefy adds the term, the late-fee clause, and the payment link to every invoice by default.