Payment terms say when an invoice must be paid. Agree them before you start work, then repeat them on every invoice so there is no doubt.
Common terms
| Term | Meaning |
|---|---|
| Due on receipt | Pay as soon as the invoice arrives |
| 7 days | Pay within a week of the invoice date |
| 14 days | Pay within two weeks |
| 30 days | Pay within thirty days, often written “Net 30” |
| End of month | Pay by the last day of the month the invoice is dated |
Which to choose
For work in people’s homes, such as repairs, cleaning or tuition, “due on receipt” or 7 days is normal. Householders expect to pay when the job is done.
For business clients, 14 or 30 days is common. Larger companies often have fixed payment runs and will tell you their terms. You can ask for shorter ones, and small suppliers often get them.
Shorter terms are not rude. They are a business decision about how long you are willing to lend your client money.
Deposits and stage payments
For bigger jobs, do not carry the whole cost until the end. Ask for a deposit before you start, which is typical where you have to buy materials, and invoice the rest in stages or on completion. Each payment gets its own invoice with its own number.
Late payment
State what happens if payment is late, and say it before the work starts. Many countries give businesses a legal right to charge interest on late payments from other businesses. In the UK, see late commercial payments on GOV.UK for the current interest rate and what you can claim.
In practice, a clear due date and a prompt reminder recover far more money than interest charges do.
Writing terms on the invoice
Use a real date. Pick the terms in the invoice generator and it works out the due date and prints it on the invoice. Add anything else, such as a cancellation policy or late fee, in the notes box, where it is saved for future invoices.