What Are Payment Terms?
Payment terms are the conditions under which you expect to be paid — most importantly, how many days after the invoice date payment is due. Clear payment terms remove ambiguity and give both sides a shared understanding of the payment deadline.
Common Payment Term Options
'Due on Receipt' means payment is expected as soon as the customer receives the invoice — common for smaller transactions or new clients. 'Net 15', 'Net 30', and 'Net 60' mean payment is due 15, 30, or 60 days after the invoice date respectively, and are common in B2B relationships where the buyer needs time to process payment internally.
Some businesses also use terms like '2/10 Net 30', which offers a 2% discount if paid within 10 days, with the full amount due within 30 days — an incentive for early payment.
How to Choose the Right Payment Terms
Shorter terms (Due on Receipt or Net 15) improve your cash flow and reduce the risk of late payment, and make sense for new clients or smaller jobs. Longer terms (Net 30 or Net 60) are often expected by larger companies with established procurement processes, and refusing them can make it harder to win that kind of work.
A good starting point for freelancers and small businesses is Net 15 or Net 30 — short enough to protect your cash flow, but standard enough that most clients won't push back.
Tips for Getting Paid Faster
State your payment terms clearly on every invoice, not just in a contract the client might not have to hand. Send invoices promptly after completing work, follow up politely as the due date approaches, and make it as easy as possible to pay by listing multiple payment methods.