Payment terms are the part of an invoice that says when the money is due and on what conditions. They are also the part most often written in shorthand the reader may not share. "Net 30" is obvious to an accounts department and opaque to a first-time client; "Due on receipt" sounds firm and gives nobody a date to schedule.
This guide explains the common terms, how to choose between them, and how to word them so they are clear to anyone. It is general information, not legal advice; rules on late-payment interest and enforceable fees differ by country. In Simple Invoice the terms live in a dedicated block and in your defaults, so once you settle on wording it appears on every invoice.
What payment terms cover
A complete set of terms answers five questions. Most invoices only need the first two spelled out, but the others should be agreed somewhere the client has seen.
- When payment is due — a period from the invoice date, or a fixed date.
- How payment should be made — bank transfer, card, a payment service — and who bears any fees.
- What happens if it is late — interest, a fixed fee, suspension of work.
- Whether anything is due up front — a deposit or advance, and whether it is refundable.
- Any incentive to pay early — a small discount for payment within a shorter window.
The common terms and what they mean
These are the phrases you will see on invoices and in contracts.
- Due on receipt — payment is expected as soon as the client receives the invoice. In practice it means "as soon as your process allows", which for a company may still be weeks. Pair it with a calendar date.
- Net 7 / Net 14 / Net 30 — the full amount is due 7, 14 or 30 days after the invoice date. Net 30 is the default in many corporate accounts departments; freelancers working with individuals and small businesses often use 14.
- End of month (EOM) — due at the end of the month in which the invoice was issued; Net 30 EOM means 30 days after that.
- 2/10 Net 30 — an early-payment discount: pay within 10 days and deduct two percent, otherwise the full amount is due in 30. Rarely worth it for small invoices.
- Payment in advance / deposit — a portion or all of the amount before work begins.
- Milestone payments — amounts tied to deliverables, each with its own invoice and due date.
Choosing a due period
Shorter is better for you, but only if the client can actually meet it. Individuals and small companies can usually pay within a week or two. Larger companies run payment on fixed cycles and will pay to their standard term whatever your invoice says; asking for 14 days from a client whose policy is 45 does not speed anything up, but knowing their cycle lets you time the invoice to land before a run.
Fourteen days is a reasonable default for freelance work. State it as both a period and a date so nobody has to count: "Due within 14 days — by 26 September 2026". Simple Invoice calculates the due date from your default due period when the invoice is created and prints it in the details block; the terms block can repeat the wording.
Deposits and milestones
A deposit — commonly a fixed share of the project price, invoiced before work starts — protects you against non-payment and funds the early weeks. For longer projects, split the remainder into milestones tied to deliverables so every invoice is small enough to approve without a meeting. State in the proposal whether the deposit is refundable and what happens if the project is cancelled. How to invoice as a freelancer covers billing rhythms in more depth.
On the final invoice, show the deposit as an amount already paid so the client sees the full project value, what they have paid and the balance due. Simple Invoice has an Amount paid field that does exactly this in the totals block.
Late fees and interest
Many jurisdictions give businesses a statutory right to charge interest on overdue commercial invoices, sometimes with a fixed compensation amount on top, whether or not the contract mentions it — the UK and EU rules linked below are examples. You can also agree a contractual rate or fee, within whatever limits apply where you operate. Either way, the policy should be in the contract before the work and repeated on the invoice, not introduced when a payment is already late.
Wording that does not overpromise: "Overdue amounts may be subject to interest and compensation as permitted by law." It preserves your rights without quoting a rate you would have to check. Whether you actually charge the fee is a separate decision; many freelancers use the right as leverage in a reminder and waive it once paid.
Wording you can adapt
Plain sentences beat shorthand. Replace the bracketed parts and put the result in your default terms.
- "Payment is due within 14 days of the invoice date, by [date], by bank transfer to the account below. Please quote [invoice number] as the payment reference."
- "A deposit of [amount] is due before work begins and is deducted from the final invoice."
- "Overdue amounts may be subject to interest and compensation as permitted by law."
- "Bank charges for international transfers are the payer's responsibility; please select the option where the full amount reaches the beneficiary."
- "Pay by [earlier date] to deduct [amount]; the full amount of [total] is due by [due date]."
Where terms go on the invoice
The due date belongs in the details block near the top where every reader looks. The terms sentence belongs near the payment details, because a client reading how to pay is also asking when. Simple Invoice's Terms block prints the invoice's terms text and can be positioned anywhere in the stack; most presets place it after payment details. Set your standard wording as a default under Settings and edit it per invoice only when a client negotiated something different. What to include on an invoice covers the surrounding elements.
Questions
What does Net 30 mean?
The full invoice amount is due 30 days after the invoice date. It says nothing about discounts or deposits unless those are stated separately.
Can I change payment terms after sending an invoice?
You can agree a change with the client, but you should not silently edit a sent invoice. Confirm the new terms in writing and, if the invoice must be reissued, void the original and issue a new one with the next number.
What if there was no written contract?
Terms printed on the invoice still communicate your expectations, and statutory late-payment rules may apply regardless. For future work, put the terms in the proposal so they are agreed before the invoice arrives.