Invoice payment terms explained

Payment terms tell your customer when and how to pay. Clear terms, agreed before work starts, are one of the simplest ways to reduce late payment.

Common terms and what they mean

• Due on receipt: pay as soon as the invoice arrives.
• Net 7 / Net 14 / Net 30: pay within 7, 14 or 30 days of the invoice date.
• EOM (end of month): pay by the end of the month the invoice was issued, or "Net 30 EOM": 30 days after the end of that month.
• 2/10 Net 30: a 2% discount if paid within 10 days; otherwise the full amount within 30 days.
• 50% upfront: half before work begins, the balance on completion. Common for projects and custom orders.
• CIA / CWO: cash in advance or cash with order, so payment comes before delivery.

Tips for getting paid on time

• Write an actual due date on the invoice as well as the terms.
• Make paying easy: bank details, a payment reference, and accepted methods.
• Invoice promptly, as soon as work is delivered.
• For larger jobs, take a deposit and show it on the invoice so the balance is clear.
• Agree late-payment terms upfront. Some countries give businesses a legal right to charge interest on late payments; check the rules that apply to you.

DocNova's invoice generator shows deposits, amounts paid and the balance due automatically.

Choosing terms for your business

Shorter terms improve cash flow, but very strict terms can lose customers in industries where 30 days is normal. A common approach is to offer shorter terms (for example 7 or 14 days) to new or small customers, and longer terms only to established customers with a good payment record. For custom work or expensive materials, ask for a deposit before you start.

Write terms customers can't misread

"Net 30" can be read as 30 days from the invoice date, from delivery, or from when the customer received the invoice. Removing doubt is easy: write "Payment due by 15 November 2026" alongside the terms, and make sure the invoice date is clear.

Following up on late payments

1. A friendly reminder a few days before the due date.
2. A polite note on the day after the due date, with the invoice attached again.
3. A firmer reminder after a week or two, mentioning any agreed late-payment terms.
4. A phone call. Many late payments are caused by lost invoices or missing purchase order numbers.