Free payment terms cheat sheet
Invoice Payment Terms Cheat Sheet
What Net 30, 2/10 Net 30, COD, EOM, and the rest actually mean, with a plain example and a recommendation for each. Tap any term to expand it.
Tap a term to see what it means, an example, and when to use it.
The balance is due within 30 days of the invoice date. The most common business payment term.
Example
A $5,000 invoice dated June 1 is due by July 1.
When to use it
Expected by larger companies and government clients. Great for established relationships, but it ties up your cash for a month, so consider Net 15 for smaller clients.
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Create a free invoice →What are invoice payment terms?
Payment terms are the conditions you set for when and how a client pays an invoice. They tell the client exactly how long they have to pay, whether there is a discount for paying early, and what happens if they pay late. Clear terms are one of the simplest levers you have for getting paid on time, vague or missing terms are a leading cause of slow payment.
The most common format is "Net X", where X is the number of days the client has to pay from the invoice date. Net 30 is the business default, but shorter terms like Net 15 protect your cash flow, and early-payment discounts like 2/10 Net 30 reward clients for paying quickly. Always put your terms in writing on the invoice and, ideally, in the contract or estimate first.
How to choose the right terms
Match the term to the risk. New client, custom work, or a large amount? Lean toward deposits, payment in advance, or short terms. Established client with a clean history? Net 30 keeps the relationship smooth.
Use discounts and deposits, not just deadlines. A 2% early-payment discount or a 50% deposit moves cash forward far more reliably than a longer due date does. A late fee, stated in advance, backs up the deadline.
Be consistent. Set your standard terms and apply them to every invoice so clients learn what to expect. Software that auto-fills terms and due dates makes this effortless.
FAQs
Frequently asked questions
What does Net 30 mean on an invoice?
Net 30 means the full invoice balance is due within 30 days of the invoice date. It is the most common business payment term. Net 15 and Net 60 work the same way with 15 or 60 days instead.
What does 2/10 Net 30 mean?
It means the full amount is due in 30 days, but the client can take a 2% discount if they pay within 10 days. It is a common incentive to encourage faster payment and improve cash flow.
What are the best payment terms for a freelancer?
Net 15 is a strong default, and a 50% deposit upfront is wise for projects over a few hundred dollars. Use due on receipt or payment in advance for new clients, and reserve Net 30 or longer for established, reliable clients.
Should I offer an early-payment discount?
Often yes. A small discount like 2% for paying within 10 days frequently pays for itself through faster cash flow and fewer late or unpaid invoices. Test it with a few clients and see how much sooner you get paid.
Where should payment terms appear?
Put them in the contract or estimate first, then repeat them clearly on every invoice, including the due date, accepted payment methods, and any late fee. Restating the terms on the invoice removes any excuse for confusion.
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