Payment Terms

What are payment terms?

Payment terms define your expectations for getting paid. They appear on your invoices and tell clients when payment is due, what payment methods you accept, and any consequences for late payment. Clear payment terms reduce confusion and give you grounds to follow up on late payments.

Common payment terms

Standard payment term options include:

• Due on Receipt — Pay immediately when the invoice is received
• Net 7 — Payment due within 7 days
• Net 15 — Payment due within 15 days
• Net 30 — Payment due within 30 days (most common)
• Net 60 — Payment due within 60 days
• 2/10 Net 30 — 2% discount if paid in 10 days, otherwise due in 30

Setting your payment terms

Consider your cash flow needs, industry norms, and client relationships. Shorter terms get money faster but may not suit all clients. Longer terms are more flexible but delay your income. Many contractors use Net 30 as a default but require deposits or shorter terms for new clients or large projects.