Example
"Payment due by 28 September 2026 (net 30). Card, ACH or check. Overdue balances accrue 1.5% monthly."
Also called invoice terms, terms of payment, or trading terms.
What it means in practice
Terms belong on the quote first, because terms the client agreed to before the work carry far more weight than terms that appear for the first time on the invoice. Repeat them word for word on the invoice.
A complete term names three things: the due date as a date, the accepted payment methods, and the late fee if you charge one.
Where it shows up on the paperwork
One line near the totals on the invoice, and the same words on the quote the client accepted. It names the due date, the accepted methods and the late fee if you charge one.
What goes wrong
- Putting terms on the invoice for the first time, when the work is already done.
- Writing a term without a date.
- Having different wording on the quote and the invoice, which is the first thing a client points at in a dispute.
Common questions
What do payment terms mean on an invoice?
Payment terms are the deadline, written as a rule rather than a date. Net 30 means thirty days from the invoice date. They set when the money is late, which is what makes chasing it reasonable.
Net 15 vs Net 30: which should you use?
Net 15 gets you paid sooner and suits small jobs and new clients. Net 30 is what larger companies expect and often what their accounts payable run is built around. Asking for Net 15 from a client who pays monthly just makes you late on their system, not early.
What does due on receipt mean?
Payment is expected when the invoice arrives, with no grace period. It works for small amounts and trade counters. On a larger invoice it usually gets ignored, because most businesses pay in runs rather than on arrival.
What payment terms should I use?
Start from net 30 as the default a commercial client expects, then shorten where you can: net 15 or due on receipt for new clients and small jobs, with a deposit when materials are a big share.
Are payment terms on an invoice legally binding?
Terms the client agreed to before the work carry far more weight than terms that first appear on the invoice. Put them on the quote, get it accepted, then repeat them word for word.
What should the terms line actually say?
The due date as a date, how to pay, and the fee if one applies. One sentence covers all three.
What are some payment terms examples?
Net 30 is the most common: payment due 30 days from the invoice date. Net 15 and net 7 shorten it. Due on receipt means immediately. 2/10 net 30 offers two percent off if paid within ten days, otherwise the full amount in thirty. 50% deposit, balance on completion is the usual form on trade work. End of month terms start the clock at the end of the month the invoice was issued in.