Invoice Payment Terms Explained: Net 7, Net 30 and Due on Receipt
Choose the right payment terms for your invoices. Learn what Net 15, Net 30 and 2/10 net 30 mean, with examples, early payment discounts and tips.
Payment terms tell your client when and how they have to pay. Clear terms get you paid on time. Unclear ones lead to late payments and awkward emails.
Common payment terms
| Term | Meaning |
|---|---|
| Due on receipt | Payment is expected as soon as the invoice is received |
| Net 7 | Payment is due 7 days after the invoice date |
| Net 14 | Due within 14 days |
| Net 30 | Due within 30 days |
| Net 60 | Due within 60 days |
| 2/10 net 30 | 2% discount if paid within 10 days, otherwise the full amount within 30 days |
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Example: invoice dated October 4
- Net 7 means the due date is October 11.
- Net 30 means the due date is November 3.
Always write the actual due date on the invoice, not only the term, so there is no room for doubt.
Early payment discounts
The term 2/10 net 30 rewards fast payers. On a $1,000 invoice:
- Paid within 10 days: $1,000 × 0.98 = $980
- Paid after day 10 and by day 30: $1,000
A discount like this can speed up cash flow, but it costs you 2% of the invoice. Use it only if getting paid sooner is worth that price.
How to choose
- Freelancers and small jobs: due on receipt, Net 7 or Net 14.
- Regular business clients: Net 30 is a common standard.
- Large companies: they may insist on Net 45 or Net 60. Ask for a deposit or milestone payments if you cannot wait that long.
- New clients: shorter terms or a deposit up front reduce your risk.
Late fees
If you want to charge a late fee or interest, state it on the invoice or in your contract before the work starts. Rules on late fees differ by place, so check your local requirements.
What to put on the invoice
- The invoice date and the exact due date.
- The payment term, for example "Net 14".
- Your bank or payment details.
- Any late fee or early payment discount.
Invoice Luxe lets you pick a payment term when you create an invoice and prints the due date on it automatically, so the client sees exactly when to pay.
FAQ
What does Net 30 mean?
The client has 30 days from the invoice date to pay.
Which payment term is best for freelancers?
Net 7 or Net 14 works well for most freelancers. For larger projects, ask for a deposit as well.
What does 2/10 net 30 mean?
The client gets 2% off if they pay within 10 days. Otherwise the full amount is due within 30 days.
Can I charge interest on late payments?
Often yes, if you agreed it in advance. Check your local rules and put it in writing.