Payment terms are the conditions that say when and how an invoice should be paid: the due date, how the client can pay, and what happens if they pay late. Net 30, Due on Receipt and a deposit plus balance are all payment terms.
Clear terms, agreed before the work starts, protect your cash flow and prevent awkward chasing later. Here are the ones you'll actually use, the legal limits around them in the EU and UK, and what to put on the invoice.
Common terms
- Due on Receipt — payment is expected as soon as the invoice arrives. Useful for small one-off jobs.
- Net 15 / 30 / 60 — payment due in that many days. See what Net 30 means for how the days are counted and variations like 2/10 Net 30.
- Payment in advance — the client pays before you start or ship. Reasonable for small orders and new clients you don't know yet.
- Deposit / part-payment — a percentage upfront, the balance on completion. Suits larger projects, and the final invoice should show the deposit already received.
- Stage payments — the fee split across milestones, for example 30% at the start, 40% at the first draft and 30% on delivery, each with its own invoice.
- Retainer — a fixed fee paid in advance, often monthly, for ongoing availability or a block of hours. See retainer.
The legal limits
Between businesses you can agree most terms you like, within limits. The EU Late Payment Directive (2011/7/EU) says a payment period fixed in a contract should not exceed 60 calendar days, unless the contract expressly agrees otherwise and the longer term isn't grossly unfair to the supplier (article 3(5)). Public authorities normally have 30 days (article 4(3)). Member states can keep or adopt rules more favourable to the supplier (article 12(3)), so your national law may be stricter.
The UK works the same way in outline. gov.uk says an agreed payment date must usually be within 60 days for business transactions and 30 days for public authorities, and that a longer period between businesses must be fair to both sides.
When a client pays late
In the EU, the directive gives suppliers statutory interest on late business payments at the central bank reference rate plus at least eight percentage points (article 2), and a fixed sum of at least €40 for recovery costs (article 6(1)). If no payment date was agreed, the 30-day default described in what Net 30 means decides when a payment becomes late.
In the UK, statutory interest on business-to-business debts is 8% plus the Bank of England base rate, but you can't claim it if your contract sets a different interest rate. You can also claim a fixed sum for recovery costs: £40 on debts up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more. The glossary has a short entry on late payment interest.
What to put on the invoice
State the terms and the due date near the total, along with how to pay. For example: “Invoice date: 16 February 2026. Terms: Net 15, due 3 March 2026. Pay by bank transfer to the IBAN below, quoting INV-042. Late payments may incur statutory interest.”
Tips for getting paid
- Write the concrete due date, not just the term.
- Agree terms before you start the work, not on the invoice.
- Make payment easy — include bank details and a reference.
- Invoice as soon as the work is delivered. When terms run from the invoice date, every day you wait moves the due date back by a day.
Set terms in one click
Invoice Forever lets you choose Due on Receipt, Net 15, 30 or 60 and works out the due date for you, so every invoice is consistent. If you email invoices from the app, you can opt in to automatic overdue reminders, up to three per invoice, roughly a week apart. It's free to use.
