Invoice payment terms tell your customer when and how to pay: for example due on receipt, Net 15 or Net 30, plus any deposit, accepted payment methods and late fee. Agree on them before the work starts, put them in your quote, and repeat them on every invoice with an exact due date.
This is general information, not legal or financial advice. Rules on payment deadlines, late fees and interest differ by country, state and province, so check official sources where you work.
Due on receipt. The customer should pay as soon as they get the invoice. Simple for small jobs and one-time customers.
Net 7, Net 15, Net 30. The full amount is due 7, 15 or 30 days after the invoice date. Useful when a business customer pays bills on a set schedule.
Deposit, then balance. Part of the price up front, the rest when the job is done. Check whether your state limits deposits for your kind of work.
Progress or milestone payments. New Zealand's government business site, business.govt.nz, suggests a phased approach for bigger jobs. Its example splits a six-month project into payments at the beginning, middle and end.
Monthly billing. For recurring work such as weekly cleaning or lawn visits, bill once a month on a set date.
Early payment discount. The UK government's GOV.UK site notes you can set your own payment terms, such as discounts for early payment and payment upfront. A term like "2/10 Net 30" means 2% off if paid within 10 days, otherwise the full amount within 30 days.
There's no single right answer. Think about:
Your cash flow. Long terms mean you're paying for fuel, supplies and your own bills while you wait.
Your customer. Homeowners can usually pay on completion. Businesses may have accounts teams and set payment runs. The Victorian Small Business Commission in Australia suggests contacting your customers' accounts areas to be certain what they need to pay invoices.
Job size. Small jobs suit due on receipt. Big jobs suit a deposit plus progress payments.
Agreement up front. Business.govt.nz suggests being upfront about how much you'll charge from the beginning, and talking to your customer about what payment plan suits them before the job begins.
Then you're relying on defaults, and they differ from place to place. In the UK, GOV.UK says that unless you agree a payment date, the customer must pay within 30 days of getting your invoice or the goods or service. For business-to-business deals, it says an agreed payment date must usually be within 60 days, or 30 days for public authorities, and a longer period must be fair to both businesses.
In the US and many other places, the details depend on state or provincial law and on what you agreed. The safest move anywhere is not to leave it to chance: write the due date on the invoice.
A late fee only works if your customer agreed to it before the work started, and it has to be allowed where you work.
UK business customers: GOV.UK says you can charge statutory interest on late business-to-business payments of 8% plus the Bank of England base rate, unless your contract sets a different rate. It also lists fixed debt recovery amounts of £40, £70 or £100, depending on the size of the debt.
US and elsewhere: limits on late fees and interest come from state or provincial law and from your written agreement. Check your state's rules, or ask a local attorney, before you add a late fee.
Whatever you choose, state it in plain words in your quote or contract, then repeat it on the invoice. Don't add a fee you never mentioned.
Here are original sample wordings to adapt. Swap in your own details, and remove anything that isn't allowed where you work.
Due on receipt: "Payment is due on receipt of this invoice. Pay by [bank transfer, check or card link]."
Net 15: "Terms: Net 15. Please pay the balance of $[amount] by [exact date]."
Deposit and balance: "A deposit of $[amount] is due when you accept this quote. The balance is due on completion, within [number] days of the final invoice."
Milestones: "Payment 1: $[amount] at signing. Payment 2: $[amount] when [stage] is complete. Final payment: $[amount] on completion."
Monthly: "We bill on the 1st of each month for the previous month's visits. Payment is due by the 15th."
Late fee (only if agreed and lawful): "As agreed in our contract, balances unpaid after [exact date] incur a late fee of [amount or rate]."
Three habits make terms work:
Write the exact due date, not just "Net 30." Customers don't always count days.
Name every way to pay, with the details right there.
Invoice as soon as the job is done. Business.govt.nz suggests invoicing as soon as the job is complete.
Example (made-up invoice and numbers):
Invoice #0142, dated March 3
Terms: Net 15. Due date: March 18
Total for the job: $1,250.00
Deposit received February 20: $250.00
Balance due: $1,000.00
How to pay: bank transfer to [account details] or check payable to [business name]
Questions about this invoice? Call or text [number]
For the rest of the invoice, see our sister site's guide to what to include on an invoice.
There's no single standard. Due on receipt, Net 15 and Net 30 are all common. In the UK, if you don't agree a date, GOV.UK says payment is due within 30 days. Pick what suits your customers and your cash flow, and write it down.
It means payment is expected as soon as the customer gets the invoice. Add an exact date anyway, so there's a clear point after which the invoice is overdue.
Only if the customer agreed to it in advance and it's allowed where you work. UK businesses can claim statutory interest on late business-to-business payments; elsewhere, check your state or provincial rules.
The customer can take 2% off if they pay within 10 days. Otherwise, the full amount is due within 30 days.
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Invoicing and taking payment from customers: payment obligations (GOV.UK)
Late commercial payments: charging interest and debt recovery (GOV.UK)