Invoice payment terms explained
"Payment terms" are simply the rules for when and how you expect to be paid. Stating them clearly on every invoice sets expectations, removes awkward back-and-forth, and — when you pick the right ones — gets money to you sooner. Here's what the common terms mean.
Net 7, Net 14, Net 30
"Net" followed by a number is the number of days the client has to pay in full from the invoice date. Net 30 means 30 days; Net 14 means two weeks; Net 7 means one week. Bigger companies often default to Net 30, but for a freelancer that's a month without cash — so it's fine to ask for shorter terms.
Due on receipt
Due on receipt means payment is expected as soon as the client gets the invoice — no grace period. It's ideal for small, one-off, or first-time jobs where you'd rather not extend credit.
Deposits and milestones
For larger projects, don't wait until the end to get paid. A deposit (say 25–50% up front) confirms the client is serious and funds your work. Milestone billing splits a big job into stages, each invoiced as it's completed — so you're never carrying the whole project's cost.
Late fees
A late fee (for example 1.5% per month on overdue balances) discourages slow payment. State it in your terms up front — a late fee only works if the client agreed to it before the invoice was late.
Which terms should you use?
- Small / one-off jobs: due on receipt, or Net 7.
- Regular clients: Net 14 is a fair balance.
- Large projects: deposit up front + milestone invoices.
- Slow payers: shorter terms + a stated late fee.
Whatever you choose, write it on the invoice and use a specific due date, not just a number of days — a real date gets paid faster.