Payment terms guide
Clear payment terms get you paid faster. Here's what each common term means and when to use it.
Common payment terms
- Due on receipt: Pay as soon as the invoice arrives. Good for small one-off jobs and new clients.
- Net 7 / Net 14: Pay within 7 or 14 days of the invoice date. Common for freelancers and trades who want cash flowing.
- Net 30: Pay within 30 days. The usual default for business clients and larger companies.
- Net 60 / Net 90: Long terms some big companies insist on. Price them in, because you wait longer for your money.
- Deposit up front: Ask for part of the price (often 25 to 50%) before you start, and invoice the balance when the job is done.
- Milestone payments: Bill in stages as each part of a project is delivered, like the Project Milestone template.
How to choose
Shorter terms are better for your cash flow; longer terms can win bigger clients. For most small businesses, Net 14 is a good balance. Ask new clients for a deposit, and agree terms before you start work, not when you send the invoice.
Late fees
State any late fee on the invoice itself, for example “1.5% per month on overdue balances”. Check what your state or country allows. A polite reminder a few days before the due date often works better than a fee.
Make paying easy
List every way you accept payment and ask the client to use the invoice number as the reference. In QuoteToPaid, put this in the How to pay box and it appears on every template.
Setting terms in QuoteToPaid
Pick a due date and the invoice shows the matching terms automatically, such as “Net 14”. Deposits and balances are worked out for you. Make an invoice now, or read how to write an invoice.