Part 1
What each common payment term means
Most payment terms are shorthand, and a homeowner, a bookkeeper and a large company's accounts team can read the same shorthand three different ways. Here's what each one usually means in practice.
Whichever term you use, put the real date beside it. Shorthand leaves open whether you're counting from the invoice date, the delivery date or the day the email was opened, and a written date settles that before anyone can use it as a reason to wait.
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Due on receipt
Payment is expected as soon as the client gets the invoice. Plenty of clients read that as "fairly soon", so it works best when you hand the invoice over in person and get paid there and then. Emailed to a company, a due-on-receipt invoice usually gets paid in its normal payment run anyway.
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Net 7 and Net 14
The client has 7 or 14 days, normally counted from the invoice date. These suit households, sole traders and small firms that pay from a banking app.
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Net 30
Thirty calendar days, weekends included. Many companies treat it as their default, and it's the term most often stretched: an invoice that just misses a payment run can sit until the next one.
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Net 60 and longer
These tend to come from the client's side: plenty of large companies have standard supplier terms of 60 days or more and won't change them for one supplier. If you accept two months, ask for a deposit or stage payments so you aren't funding the whole job yourself.
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EOM (end of month)
"Due EOM" normally means by the last day of the month the invoice is dated. "Net 30 EOM", also written as "30 days end of month", usually means 30 days after that month ends, so an invoice dated 10 November falls due on 30 December. Some accounts teams read it as the end of the following month instead, another reason to print the date.
Part 2
Deposits and staged payments
A deposit moves some of the risk back to the client. Without one, you may have done the work and bought the materials before a penny arrives, and a client who cancels the week before leaves you with an empty date you turned other work away for.
Deposits make most sense for work booked against a fixed date, jobs that need materials bought in, and anyone you haven't billed before. Staged payments suit longer projects, with each part of the price falling due when a point both of you can see has been reached.
For each payment, the terms should say how much, when it's due and what happens to it if the job is cancelled. Cancellation is where most deposit arguments start. Calling a deposit non-refundable only stands up if the client was told before paying, so put the rule in the quote or booking confirmation as well as on the invoice. With household clients, consumer law in many countries also expects the amount you keep to be reasonable for what you'd lose.
If you invoice with Invooza, switch on advance tracking on the Rules page and each deposit or stage payment you record prints under the total with its date, followed by the balance still owed.
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Deposit, then balance on completion
Two payments that any client can follow, and a sensible default for jobs lasting from a few days to a few weeks.
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Deposit, then balance before delivery
Photographers and designers often release final files once the balance has cleared. The client wants the files, so there's little to chase.
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Stage payments
Three or four instalments over a longer job, set out in the quote, with each one due when a defined part is finished.
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Monthly in advance
For regular services, the client pays at the start of each month for that month's visits, so you find out about a missed payment before doing the work rather than after.
Part 3
Early payment discounts
An early payment discount offers a small reduction to clients who pay before the normal due date. In business-to-business trade it's often written as "2/10 Net 30": 2% off if paid within 10 days, otherwise the full amount within 30.
Work out the cost before you offer one. Giving away 2% to be paid about three weeks sooner is an expensive way to improve cash flow, and some clients deduct the discount and still pay late. A deposit or shorter standard terms usually gets you paid sooner for less.
If you do offer one, write it into the terms as a condition and invoice the full amount. A discount line that reduces the total looks like it applies no matter when the client pays. If you're VAT-registered, check how your tax authority wants the discount shown, because some countries, the UK among them, have specific VAT rules for prompt payment discounts.
Invoice total: £1,200.00 Pay by 12 November 2026 and deduct 2% (£24.00): £1,176.00. Otherwise the full £1,200.00 is due by 2 December 2026.
Part 4
Late fees and interest: what you can actually charge
A late fee you set yourself only holds up if the client agreed to it before the work began, in your quote, booking terms or contract. One that first appears on an overdue invoice rarely gets paid, and it hands the client something else to dispute.
Beyond what you've agreed, local law decides what's allowed. Some countries give businesses a legal right to interest when another business pays late. In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 lets a business claim interest and a fixed compensation amount on overdue business-to-business invoices, and EU member states have their own rules based on an EU directive. Check GOV.UK or your own government's guidance for the current rates and amounts before quoting any figure.
Rules like the UK's cover business customers only. When the client is a household, such as a pet owner or a homeowner, you can't fall back on them, and consumer law in many countries limits charges that look like a penalty. A modest fee, agreed in writing at booking, is much easier to stand behind than a large one.
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A fixed late fee
One charge once an invoice is a set number of days overdue. Clients understand it straight away, which counts for more than the size of the fee.
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Interest
A percentage added for each period the invoice stays unpaid. It scales fairly on large invoices but takes more working out.
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A pause clause
A line in your terms saying new bookings or deliveries stop while any invoice is overdue. For ongoing services it often works better than a fee, since the client notices at their next booking and there's nothing extra to collect. Write it in at the start, because the same rule announced for the first time mid-dispute reads as a threat.
Part 5
How to choose terms for your business
Start with how long you can afford to wait. If you pay for materials, fuel or a helper before the client pays you, every day of credit you give comes out of your own account. Long terms can feel like good service, but in effect they're an interest-free loan to the client.
Then think about how the client pays. Households and sole traders tend to pay from a phone, so a short term with a clear date suits them. Companies pay in batches, often weekly or monthly, and many apply their own terms whatever your invoice says. Before the first invoice, ask what their terms are, whether they need a purchase order number and when the next payment run is, then set a due date just before it.
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Paid at handover
Grooming, hairdressing, mobile repairs and emergency call-outs. The customer is there when the job ends, so take payment then and let the invoice double as the receipt.
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Regular household services
Weekly or fortnightly cleaning, dog walking and garden visits. Invoice monthly in advance, or weekly with 7 days to pay, so no balance builds up that's hard to recover if the client stops booking.
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Projects for small businesses
Design, photography, copywriting and small building jobs. A deposit to start, then 7 or 14 days on the final invoice, covers most of them.
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Larger organisations
Expect 30 days or more and plan your cash around it. Asking for stage payments tends to get further than haggling over the term itself.
Part 6
How to word payment terms on an invoice
Good terms wording is short, uses the real due date and sits next to the total, which is where the client looks when they decide to pay. Put how to pay and the reference to quote in the same block.
Longer conditions, such as cancellation rules, late fees or who owns the files until payment clears, can go in a short terms section lower down. In Invooza, each point you add under Payment terms and conditions on the invoice form, or give the assistant in chat, prints as a bullet point on the PDF. Swap your own amounts and dates into the examples below.
Payment due on completion of the appointment. Paid in full by card on 2 November 2026. Thank you.
Payment due within 14 days, by 16 November 2026. Please pay by bank transfer and quote INV-0142 as the reference.
Terms: 30 days end of month. Due date: 30 December 2026. Purchase order: PO-88214. Please quote the PO number and invoice number with your payment.
Booking total: £800.00 (shoot on 20 March 2027) Deposit: £240.00, due by 9 November 2026 to secure the date. Non-refundable if the booking is cancelled less than 8 weeks before the shoot, as set out in the booking terms. Balance: £560.00, due by 13 March 2027 (7 days before the shoot).
Regular clean, December 2026: 5 visits (every Wednesday, 2 to 30 December). Payable in advance by 1 December 2026. Visits are paused while any invoice is more than 7 days overdue.
Payment due within 30 days of the invoice date, by 2 December 2026. We reserve the right to claim interest and compensation for late payment under the Late Payment of Commercial Debts (Interest) Act 1998.
FAQ
Frequently asked questions
What does Net 30 mean on an invoice?
The client has 30 days to pay, usually counted from the invoice date and including weekends and bank holidays. Some clients count from when they received the invoice or the goods instead. Writing the actual due date next to the term removes the doubt.
What does 2/10 Net 30 mean?
The client may take 2% off if they pay within 10 days; otherwise the full amount is due within 30 days. It's mostly seen between businesses, and it costs you that 2% even on clients who would have paid promptly anyway.
Can I change my payment terms for an existing client?
Yes, for future work. Tell the client in writing, give the date the new terms start, and leave anything already agreed or invoiced on the old terms. A regular client told a month ahead about shorter terms or a deposit is far more likely to accept it than one who first notices the change on an invoice.
What payment terms are standard in the UK?
There isn't one standard. Seven or 14 days is common for sole traders and household customers, and 30 days is common between businesses. Where a business-to-business sale has no agreed payment date, UK late payment rules supply a default period, which GOV.UK describes. Agreeing a date with each client avoids relying on it.
Should payment terms go on the invoice or in the contract?
Both. The quote, contract or booking confirmation is where the client agrees to them, and the invoice repeats them so whoever pays it can see the due date. Terms that first appear on an invoice carry far less weight than ones the client accepted before the work started.