Invoice Payment Terms Explained: Net 7, 30, and Everything Between
Net 7, Net 30, 2/10 Net 30, CIA, EOM — here is what each payment term actually means and how to pick the right one for each client.
Payment terms are the small print that decides when money lands in your account. They look like jargon ('Net 30', '2/10 Net 30', 'EOM') but each one encodes a simple rule. This guide translates the common terms, explains when to use each, and shows you how to state them so clients actually honour them.
What 'Net' means on an invoice
'Net' just means 'full amount'. Net 30 says the full invoice is due 30 days after the invoice date (or after delivery, if you specify 'from receipt of goods'). Net 7, Net 14, and Net 60 follow the same logic with different countdowns. The longer the term, the more you are effectively financing your client's business.
The most common terms, translated
- Due on receipt: pay immediately — best for tiny jobs or trusted clients
- Net 7: due a week after the invoice date — common for freelancers with quick-turnaround work
- Net 14: two weeks — a middle ground that keeps cash flowing
- Net 30: the corporate default; most accounts payable systems run monthly cycles
- Net 60 / Net 90: common with large enterprises and government; only accept if you can afford the wait
- CIA (Cash in Advance): pay before work starts — use for new clients or large projects
- EOM (End of Month): due at the end of the month in which the invoice is issued
Early-payment discounts: 2/10 Net 30
An early-payment discount looks like '2/10 Net 30'. It means: if the client pays within 10 days, they can take 2% off; otherwise the full amount is due in 30 days. A 2% discount for getting money 20 days earlier is roughly equivalent to a 36% annual return — useful for the client, expensive for you. Only offer it if your cash flow genuinely benefits from the speed.
Tip: if a client asks for Net 60 as 'standard policy', push back with Net 30 as your default and offer Net 60 only for established accounts. Big companies negotiate payment terms; small ones should not be their free lender.
How to write terms so they stick
State terms in three places: on the invoice itself, in your contract or statement of work, and in the email you send. Consistency matters because accounts payable teams will default to the longest term they can find. If your invoice says Net 14 but your contract said Net 30, they will pay in 30.
When to deviate from your default
Most freelancers settle on Net 14 or Net 30 as a default and adjust per client. Use shorter terms (Net 7, Due on Receipt) for one-off jobs under a day's work, and longer terms (Net 30, Net 45) for retainer clients where the relationship is solid. New clients always start short — you can always relax terms later, but you cannot tighten them without a conversation.
What to do when terms are ignored
If a client consistently pays late despite a clear Net 30, your terms need teeth. Add a sentence stating that overdue invoices accrue interest at the statutory rate (in the EU and UK this is the central bank base rate plus 8%). Mention it on the invoice, not just in the contract. The mere presence of an interest clause usually shifts late payers into on-time payers.
Tip: in the UK and EU, the Late Payment of Commercial Debts legislation gives you a legal right to charge statutory interest and a fixed sum for debt recovery costs. You do not have to put it in your contract — it applies automatically to business-to-business sales.
Picking terms for your first few invoices
For your first three or four invoices, keep it simple: Net 14, due date printed clearly, no early-payment discount. Once you can predict when a client pays, you can fine-tune. The goal of payment terms is not to look professional — it is to make the date money lands in your account predictable.
Put it into practice
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