Payment terms tell your client when an invoice is due and how to pay it. The most common are "due on receipt" and Net 30, which means payment is due 30 days after the invoice date.
Choosing your terms is one of the simplest levers you have on cash flow. Here's what each common term means, how to pick yours, and how to word them.
Common invoice payment terms
| Term | What it means | Good for |
|---|---|---|
| Due on receipt | Payment is due as soon as the client receives the invoice. | Small jobs, one-time clients |
| Net 7, Net 15 | Payment is due 7 or 15 days after the invoice date. | Freelancers and small businesses that want to be paid quickly |
| Net 30 | Payment is due 30 days after the invoice date. | The standard for business clients |
| Net 60, Net 90 | Payment is due 60 or 90 days after the invoice date. | Large companies that insist on them. Price the wait in. |
| EOM | Payment is due at the end of the month the invoice was issued. | Clients who pay in monthly batches |
| 2/10 Net 30 | A 2% discount for paying within 10 days, otherwise due in 30. | Encouraging early payment on larger invoices |
| Upfront deposit | Part of the fee, often 25% to 50%, is paid before work begins. | New clients and larger projects |
| Milestone payments | The fee is split across project stages, each invoiced when reached. | Long projects with clear phases |
| Retainer | The client prepays, and work is billed against the balance. | Ongoing work, see retainer management |
| Recurring | The same amount is billed on a schedule, such as monthly. | Maintenance plans, subscriptions, monthly services |
How to choose your payment terms
- Start with your cash flow. If you pay contractors or costs upfront, ask for a deposit and use short terms.
- Match the client. A large company may require Net 30 or longer. A small business or individual can usually pay on receipt.
- Scale with risk. New clients and big projects call for deposits or milestones. Established clients can earn longer terms.
- Agree before you start. Put your terms in the proposal or contract, so the invoice only repeats what was already agreed.
How to write payment terms on an invoice
State the terms and the exact due date, plus how to pay and any late fee. A few examples you can adapt:
If you charge for late payment, say so here too. Our guide to charging late fees on invoices has wording for that.
How Clientary helps
In Clientary, every invoice carries a due date and your terms, and clients can pay online by card, ACH, or PayPal the moment it arrives. Deposits can be invoiced automatically when a client signs, and recurring billing handles monthly terms on its own.
