Invoice Payment Terms FAQ: What They Mean & Which to Use

Net 30 means the invoice is due 30 days from the invoice date. If you invoice on July 1, payment is due by July 31. It is the most common payment term for B2B transactions.

Net 15: payment due 15 days from invoice date (faster — preferred by freelancers). Net 60: payment due 60 days from invoice date (common with large corporations and government).

2/10 Net 30 means: the buyer gets a 2% discount if they pay within 10 days; otherwise the full amount is due in 30 days. It incentivizes early payment.

Net 7 or Net 14. The shorter your terms, the faster you get paid. Most clients will accept short terms if stated clearly upfront. Pair shorter terms with a deposit requirement for new clients.

Due on Receipt (also DOR or 'Payable Immediately') means payment is expected as soon as the invoice is received — within 24–48 hours. Used for smaller transactions or clients with a history of slow payment.

COD (Cash on Delivery / Cash on Demand) means payment is made at the point of delivery. Common in product-based businesses and logistics. Rare in service-based freelance work.

PIA means the client pays before work begins. Used for new clients, high-risk projects, or rush orders. Reduces risk of non-payment but may lose clients who aren't comfortable paying upfront.

Yes, if your contract or invoice states it. Common rates are 1.5–2% per month on the overdue balance. In the UK, the Late Payment of Commercial Debts Act allows 8% above the Bank of England base rate. Always state the terms before work begins.

A retainer is a recurring advance payment made by a client to secure your availability and services each month. Typically invoiced at the start of each month for a fixed fee.

State them clearly on your invoice and in your contract. Send payment reminders at 7, 14, and 30 days past due. Charge late fees as stated. For persistent non-payers, send a formal demand letter, then consider small claims court.