Invoice Payment Terms Explained: Net 15, Net 30 and Due on Receipt
“Net 30” looks like jargon until the day a client pays you 60 days late and says they were within terms. Payment terms are the rules for when and how an invoice must be paid. Setting them clearly, and in writing, is one of the cheapest ways to improve your cash flow.
This guide explains the most common payment terms, how to calculate a due date, when an early-payment discount makes sense, and how to add a late fee without damaging the client relationship.
Short answer: “Net 30” means the full invoice amount is due 30 days after the invoice date. “Net 15” means 15 days, and “Due on receipt” means the client should pay as soon as they receive the invoice.
Common invoice payment terms
These are the terms you will see most often. “Net” refers to the net (full) amount, and the number is the days the client has to pay it.
| Term | Meaning | Best for |
|---|---|---|
| Due on receipt | Pay immediately when the invoice arrives | Small jobs, new clients |
| Net 7 / Net 14 / Net 15 | Pay within 7, 14 or 15 days | Freelancers, quick projects |
| Net 30 | Pay within 30 days | Standard for businesses |
| Net 60 / Net 90 | Pay within 60 or 90 days | Large companies (often hard on small suppliers) |
| 50% upfront | Half before work starts, half on delivery | Larger projects, custom work |
| EOM | Due at the end of the month of the invoice | Companies that pay in monthly cycles |
How to calculate the due date
Count the days from the invoice date, not from the day the client opens it. An invoice dated 1 November 2026 with Net 30 terms is due on 1 December 2026. An invoice dated 20 November with Net 15 is due on 5 December.
Always write the actual due date on the invoice as well as the term. “Net 30 – due 1 December 2026” leaves no room for argument.
How to choose the right terms
- Be shorter with new clients. Ask for a deposit or use Net 7 until they have a payment history with you.
- Match the project size. For large projects, split the payment into milestones rather than one big invoice at the end.
- Know your own cash needs. If rent and salaries are due every month, 60-day terms from a client can hurt you badly.
- Check the contract. A large client may insist on its own terms. If so, agree the date in writing before you start, and price the delay into your rate.
Early-payment discounts
Some businesses offer a small discount for fast payment. You may see this written as “2/10, net 30”, which means the client can take 2% off if they pay within 10 days, otherwise the full amount is due in 30 days.
| Invoice total | Paid within 10 days (2% off) | Paid by day 30 |
|---|---|---|
| 100,000 | 98,000 | 100,000 |
A 2% discount for getting paid 20 days earlier is a high annual return on your money, so it can make sense when cash is tight. But it also lowers your margin, so only offer it if you can afford it.
Adding a late payment fee
A late fee, such as 1.5% per month on the overdue amount, can encourage prompt payment. On a 100,000 invoice, 1.5% is 1,500 for each month it is late. Two rules matter. First, state the fee on the invoice and in your contract or proposal before the work starts. Second, check what your country allows, because some places limit the interest you can charge. If you are unsure, ask your accountant.
Many freelancers never charge the fee but keep it on the invoice, because the clause alone makes clients pay more promptly.
Keep track of due dates
Terms only help if you notice when an invoice becomes overdue. The free Billfy invoice tracker shows which invoices are unpaid, which are overdue and what you are still owed. When one is late, use our unpaid invoice follow-up templates.
Frequently asked questions
What does Net 30 mean on an invoice?
The full amount is due 30 days after the invoice date.
What is the best payment term for freelancers?
Net 7 to Net 15 is common for freelancers, with a deposit for larger projects. Net 30 is the usual standard when you work with businesses.
Can I charge interest on late invoices?
Often yes, if you stated it in your contract or on the invoice before the work. Some countries cap the rate, so confirm the rules that apply to you.
What is the difference between due on receipt and Net 0?
They mean the same thing: payment is due as soon as the invoice is received.
Should payment terms be on every invoice?
Yes. Put the term and the actual due date on each invoice so there is no doubt.
Tax rules, rates and deadlines differ by country and change over time, and they depend on your situation. This guide is general information, not tax or legal advice, so confirm the details with your accountant or tax authority.