Payment terms are the part of your invoice that decides when you actually get paid, and most freelancers set them by copying whatever they have seen elsewhere. This guide explains the common invoice payment terms in plain English: Net 30, Net 15, Net 60, due on receipt, EOM, and 2/10 Net 30. You will learn what each one means, which to choose for your business, and how to phrase terms so clients pay faster.
What are invoice payment terms?
Invoice payment terms are the conditions on your invoice stating when payment is due and what happens if it is late. They appear as short codes like Net 30 or due on receipt, sometimes with an early-payment discount such as 2/10 Net 30. Because they form part of your contract, clear terms prevent most payment disputes before they start.
Where they sit matters. Put the term in two places: on the quote or contract before the work starts, and on the invoice itself, near the total, with the exact due date written out, for example “Payment due: 21 November 2026 (Net 30)”. Never rely on a code alone if your clients are not finance people. A spelled-out date removes all ambiguity. LancerBill’s invoice generator includes a dedicated payment-terms field and prints the due date automatically.
Watch out: If your invoice says nothing about payment terms, you have not lost your rights, but you have made the due date arguable. In the UK, a B2B invoice with no agreed date becomes overdue 30 days after the client receives it under the Late Payment of Commercial Debts (Interest) Act 1998. Agreeing terms in writing simply removes the argument.
What does Net 30 mean?
Net 30 means the full invoice amount is due 30 days after the invoice date. It is the most common payment term in business-to-business work. If you set no term, UK law gives you the same window: a B2B invoice becomes overdue 30 days after the client receives it, under the Late Payment of Commercial Debts (Interest) Act 1998.
The number after “Net” is always the days. Net 15 gives the client 15 days; Net 60 gives 60 days; Net 7 is common for small or first-time orders. State clearly whether your count starts on the invoice date or the date the client receives the invoice, because finance departments interpret this differently, and a three-day gap can matter when interest is involved.
Tip: Freelancers rarely need Net 30. Most of your clients pay by bank transfer in minutes, and a shorter term like Net 14 improves your cash flow without deterring serious clients. Reserve Net 30 for larger businesses whose payment cycles genuinely require it.
Net 15 vs Net 30 vs Net 60: which payment term should you choose?
For most freelancers, Net 14 or Net 15 is the sweet spot: short enough to keep cash flowing, long enough that client finance teams can pay without friction. Use Net 30 for larger businesses with fixed monthly payment runs, and reserve Net 60 for enterprise contracts where the work is worth the wait. The table below compares the common options.
| Term | Meaning | Typical for | Cash-flow effect |
|---|---|---|---|
| Due on receipt | Pay immediately on receiving the invoice | Small one-off jobs, deposits | Fastest, but hard to enforce literally |
| Net 7 / Net 15 | Full amount due within 7 or 15 days | Freelancers, contractors, SMBs | Strong cash flow, most clients cope fine |
| Net 30 | Full amount due within 30 days | B2B standard, agencies, corporates | Comfortable for clients, slower for you |
| Net 45 / Net 60 | Full amount due within 45 or 60 days | Large enterprises, supply chains | Slow; only accept if the work is worth it |
| 2/10 Net 30 | 2% discount if paid in 10 days, else full in 30 | Suppliers offering early-payment discounts | Optional discount cost for faster cash |
Worked example: what Net 15 is worth in cash flow
Say you bill £6,000 a month, spread evenly. Your average outstanding balance is roughly your daily billing multiplied by your payment term:
- Daily billing: £6,000 / 30 = £200
- On Net 30: £200 x 30 days = £6,000 of your money sitting with clients
- On Net 15: £200 x 15 days = £3,000 sitting with clients
Switching from Net 30 to Net 15 frees roughly £3,000 of working capital, permanently. That is the simplest cash-flow improvement most freelancers never make. For longer enterprise terms, check the rules: under the EU Late Payment Directive 2011/7/EU, contracted payment periods between businesses should not exceed 60 calendar days unless expressly agreed and not grossly unfair to the creditor.
What is 2/10 Net 30 and how do cash discounts work?
2/10 Net 30 is an early-payment discount: the client gets a 2% discount if they pay within 10 days, otherwise the full amount is due within 30 days. The format is always discount/days/Net/days, so 1/15 Net 30 means 1% off for payment within 15 days. It rewards fast payers instead of punishing slow ones.
As the freelancer, the discount is a cost: 2% of every invoice that takes it. Whether it is worth it depends on how much you value early cash. As the client, taking the discount is one of the best returns available anywhere. Here is why.
Worked example: the true cost of 2/10 Net 30
Take a £1,500 invoice with terms 2/10 Net 30:
- Paid within 10 days: 2% discount = £30, so the client pays £1,470
- Paid on day 30: full £1,500
Skipping the discount means paying £30 extra for 20 days of extra credit (day 10 to day 30). The annualised rate is:
- (Discount / (100 – discount)) x (365 / extra days) = (2 / 98) x (365 / 20)
- = 0.0204 x 18.25 = 37.24% per year
That is the effective interest rate a client pays by ignoring the discount, far above any bank loan or credit card. So if your clients take the discount, it genuinely helps them, and it helps you: you get paid 20 days earlier for a 2% cost. Use LancerBill’s profit margin calculator to check whether a 1-2% discount still leaves your project margins healthy before offering it.
Tip: In practice, 1% for payment within 10 days is often enough to move payment dates; few freelancers need to give away 2%. Test 1/10 Net 30 first and watch your average payment time before offering more.
What other payment terms will you see on invoices?
Beyond the Net family you will meet due on receipt, EOM (end of month), fixed monthly payment dates, cash in advance, milestone payments, and retainer terms. Each sets a different due date, and knowing what they mean stops you agreeing to a payment schedule that starves your cash flow.
- Due on receipt: pay as soon as the invoice arrives. Common for small jobs, though “on receipt” is hard to enforce precisely, so pair it with a date.
- EOM (end of month): payment due at the end of the month. Variants like “Net 30 EOM” mean 30 days after the end of the invoice month.
- 15th / 25th (or “2nd and 20th”): payment due on fixed monthly dates, common with larger companies running payment batches.
- CIA (cash in advance): pay before work starts. Used for first-time clients or high-risk orders.
- Milestone / stage payments: a large project split into payments tied to deliverables, for example 40% upfront, 30% on draft, 30% on delivery. Ideal for projects over a few thousand pounds.
- Retainer terms: recurring monthly payment, usually due on the 1st or within a few days, for ongoing work.
For project work, milestone terms beat a single Net 30 invoice at the end. They keep cash flowing during the work and limit your exposure if the client disappears. Agree them on the quote first; LancerBill’s quote generator lets you spell out payment terms before the project starts.
How do you set payment terms that get you paid faster?
Put the term in the quote before work starts, default to Net 14 or Net 15, write the exact due date on every invoice, send invoices immediately, and state the late-payment consequences. Terms agreed upfront are paid on time far more often than terms introduced on the invoice. Follow these rules in detail:
- Choose the term before the work starts. Put it in the quote or contract, not as a surprise on the invoice.
- Default to Net 14 or Net 15 for freelance clients. It is fair, it is common for contractors, and corporate accounts departments accept it.
- Write the exact due date on the invoice. “Net 15” plus “Payment due: 21 October 2026” leaves no room for interpretation.
- Send the invoice immediately. The payment clock starts when you invoice. A Friday-night send starts the weekend clock too.
- State the late-payment consequences. A line like “Late payments are subject to statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998” makes the due date real. Our guide to charging late payment fees on UK invoices shows the exact numbers you can claim.
- Consider a deposit for new clients. 30-50% upfront is normal for project work and filters out unserious buyers.
Our step-by-step guide to writing an invoice covers the full layout, including where payment terms sit alongside the invoice number, due date, and bank details.
What happens if a client pays after the due date?
The day after your payment term expires, the invoice is overdue and late-payment rights begin. In the UK you can claim statutory interest at 8 points above the Bank of England base rate plus £40-£100 fixed compensation per invoice, automatically and without a contract clause.
For the full calculation, see our guide to late payment fees on UK invoices or run the numbers through LancerBill’s late payment fee calculator.
Long payment terms have limits. Under the EU Late Payment Directive 2011/7/EU, B2B payment periods should not exceed 60 days unless expressly agreed and not grossly unfair, and the UK’s proposed Commercial Payments Bill would cap them at 60 days (30 for the public sector) with no ability to contract out. If a client demands 90-day terms, you can push back, and our guide to what to do when invoices go overdue walks through the escalation steps if payment never comes.
Key takeaways
- Net 30 means the full amount is due 30 days after the invoice date; freelancers usually get paid faster on Net 14 or Net 15.
- 2/10 Net 30 offers a 2% discount for payment within 10 days; skipping it costs the payer over 37% a year in effective interest.
- Write the exact due date on every invoice and agree terms in the quote first, not as a surprise.
- With no agreed term, a UK B2B invoice becomes overdue 30 days after receipt under the Late Payment of Commercial Debts (Interest) Act 1998.
- Send invoices immediately, state late-payment consequences, and use milestone payments or deposits on larger projects.
Frequently asked questions
What is the difference between Net 30 and due on receipt?
Net 30 gives the client 30 days from the invoice date to pay. Due on receipt asks for payment as soon as the invoice arrives. Net 30 is the business standard and easier to enforce; due on receipt suits small one-off jobs but is hard to define precisely, so always pair it with a specific date.
What are the best payment terms for freelancers?
Net 14 or Net 15 works for most freelance work: short enough to keep cash flowing, long enough for client finance teams to process. Use due on receipt for small jobs, 30-50% deposits for new clients, and milestone payments for projects over a few thousand pounds.
Is 2/10 Net 30 worth offering?
It depends on your margins and cash needs. A 2% discount costs you 2% of revenue on invoices that take it, but you get paid roughly 20 days earlier. If cash flow is tight, that trade is often worth it. Check your margins first, and consider starting with a smaller 1/10 Net 30 discount.
Can I charge interest if a client ignores my payment terms?
Yes, in the UK. Under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business invoices accrue statutory interest at 8 percentage points above the Bank of England base rate from the day after the due date, plus fixed compensation of £40, £70 or £100 per invoice. You do not need a late-payment clause for this right to exist.
Can a client force me to accept 90-day payment terms?
You can refuse, and long terms are hard to defend legally. Under the EU Late Payment Directive 2011/7/EU, B2B payment periods should not exceed 60 calendar days unless expressly agreed and not grossly unfair to the creditor. The UK’s proposed Commercial Payments Bill would turn that 60-day cap into hard law.
When payment arrives, confirm it promptly. Our guide on how to write a receipt for a payment received covers what to include, including how to receipt a part payment against an invoice.
This guide is for general information only and is not financial, tax or legal advice.