Net 30, Net 60, Net 90:
Payment Terms Explained

You've seen "Net 30" on invoices your whole career. But what does it actually mean — and more importantly, should you be using it? Payment terms are one of the most misunderstood parts of invoicing, and choosing the wrong ones can quietly cost you weeks of cash flow every year.

This guide explains every major payment term in plain English, when each one makes sense, and how to use them to get paid faster.

What Does "Net" Mean on an Invoice?

"Net" simply means the total amount due — net of any discounts, taxes, or deductions. When you write "Net 30" on an invoice, you're saying: the full amount is due within 30 days. That's it. No complexity. The number after "Net" is the number of days the client has to pay.

The Full Payment Terms Glossary

Term	Meaning	Best for
Due on Receipt	Payment expected immediately upon receiving the invoice	Small one-off jobs, new clients
Net 7	Payment due within 7 days	Short projects, ongoing retainers
Net 14	Payment due within 14 days	Freelancers, small businesses
Net 30	Payment due within 30 days	Standard B2B, most freelance work
Net 60	Payment due within 60 days	Large companies, agencies
Net 90	Payment due within 90 days	Enterprise, manufacturing, construction
2/10 Net 30	2% discount if paid within 10 days, otherwise full amount due in 30	When you want to incentivise early payment
EOM	End of month — payment due by last day of the month the invoice was issued	Monthly recurring billing
COD	Cash on delivery — payment at time of delivery or service	Trades, deliveries, one-off retail

Which Payment Term Should You Use?

The honest answer: as short as your clients will accept. Longer payment terms directly hurt your cash flow — every extra day a payment is outstanding is a day you can't use that money. The ideal payment term is the shortest one that doesn't cost you the client relationship.

For most freelancers: Net 14

Net 30 became the default for freelancers by convention, not logic. Net 14 is perfectly reasonable for project-based work — most clients can process a payment in two weeks. Start with Net 14 on new clients; only extend to Net 30 if they push back.

For agencies and larger projects: Net 30

Larger companies often have formal accounts payable processes that require routing invoices through approvals. Net 30 gives their internal systems enough time to process payment without you having to chase immediately after submission.

For enterprise clients: accept Net 60, negotiate hard

Some large companies have Net 60 or even Net 90 as their standard payment policy — and they won't change it for you. If the contract value is significant enough, accepting their terms may make sense. If not, push back: request a shorter term or ask for a deposit to offset the float.

Why "Due on Receipt" Is Often a Mistake

"Due on receipt" sounds like the fastest way to get paid. In practice, it often backfires. Because there's no specific date, it creates no psychological urgency — and it can't be scheduled in a client's accounts payable system, which typically processes payments on weekly or bi-weekly runs.

The result: an invoice with "due on receipt" often sits longer than one with "Net 14" because clients don't know when to prioritise it. A specific date always beats a vague instruction.

Early Payment Discounts: 2/10 Net 30

This term means: pay within 10 days and get a 2% discount; otherwise the full amount is due in 30 days. It's an incentive for clients to pay early — useful if you have cash flow pressure and would rather receive 98% now than 100% in a month.

The maths only works if the cost of waiting (your cash flow need) exceeds 2% of the invoice. For most freelancers, it's not worth the complexity. For businesses with tight working capital or large invoices, it can be a useful lever.

Late Payment Fees: Make Them Real

Adding a late payment clause to your invoice terms — even if you never enforce it — measurably reduces late payments. The most common wording is: "Invoices unpaid after the due date are subject to a 1.5% monthly late fee."

Include this in your invoice notes section. It doesn't require a lawyer to draft. It just needs to be stated. The psychological effect of a financial consequence is greater than the consequence itself.

---

How to Write Payment Terms on Your Invoice

Keep it simple and specific. The best invoice payment term line looks like this:

That's it. Clear term, specific date, payment method, late fee warning. No legal jargon, no ambiguity.