Getting paid
Invoice Payment Terms Explained (Net 15, Net 30, Due on Receipt)
What net 15, net 30, EOM, and 2/10 net 30 actually mean, how to pick terms by client type, and how late fees work — with wording you can copy.
By Stephen Fox · Updated July 9, 2026 · 6 min read
Payment terms are the part of the invoice that says when the money is due — and they are a negotiation, not a formality. Terms that are too loose starve your cash flow; terms that ignore how your client’s accounts payable actually runs guarantee “late” payments that were never going to arrive sooner. Here is what the standard terms mean and how to choose.
The common terms, decoded
- Due on receipt — payable immediately; in practice, within a few days
- Net 7 / Net 14 / Net 15 — full amount due 7, 14, or 15 calendar days after the invoice date
- Net 30 / Net 60 — due 30 or 60 days after the invoice date; net 30 is the default expectation for business-to-business work
- EOM — due at the end of the month the invoice was issued in
- 2/10 net 30 — the client may take a 2% discount if they pay within 10 days; otherwise the full amount is due in 30
How to choose terms
- Consumers and one-off residential jobs: due on receipt or net 7 — the relationship is short and the amount is fresh
- Freelance client work: net 14 is a sensible default — professional but not a month of free credit
- Established business clients: net 30 is standard; ask their AP team when payment runs happen and date invoices to catch the next run
- Large or slow-paying organizations: negotiate before the work — a deposit up front beats fighting net 60 later
Late fees, done properly
A late fee only works if the client agreed to it before the invoice — state it in your estimate or contract, then restate it on every invoice. Typical practice is 1–1.5% per month on the overdue balance (roughly 12–18% per year) or a modest flat fee. Interest caps vary by state and country, so check your local rules before setting a rate. The fee’s real job is not revenue — it is making “pay this one first” the path of least resistance.
Terms wording you can copy
Payment is due within 15 days of the invoice date.
A late fee of 1.5% per month applies to balances more than 15 days overdue.
We accept bank transfer, card, and check. Please reference invoice #2026-014.
Shorter terms, sent faster
Two levers move payment speed more than anything else: send the invoice the day the work finishes, and keep terms as short as the relationship allows. Net 30 sent two weeks late is really net 44. Set the due date automatically with the free invoice generator.
Frequently asked questions
Does net 30 mean 30 business days?
No — net terms are calendar days counted from the invoice date unless the contract explicitly says otherwise. An invoice dated July 1 on net 30 terms is due July 31.
Can I add a late fee to an invoice after it’s overdue?
Not fairly, and in many places not enforceably. The client must have agreed to the fee in advance — in the contract, estimate, or the original invoice’s stated terms. Going forward, put the late-fee line on every estimate and invoice so it is always pre-agreed.
What terms should a new freelancer start with?
Net 14 with a deposit for anything sizable. It is short enough to protect your cash flow, long enough that no reasonable client objects, and the deposit filters out the clients who were never going to pay promptly.