Clear payment terms are one of the simplest ways to get paid on time. Most late payments start with vague terms, or none at all.
What payment terms cover
- When payment is due.
- How to pay.
- Any deposit or staged payments.
- Any discount for paying early.
- Any fee or interest for paying late.
Agree them before the work starts, and put them on every quote and invoice.
Common terms, explained
- Due on receipt. Pay as soon as the invoice arrives. Common for small jobs.
- Net 7, net 14, net 30. Pay within 7, 14 or 30 days of the invoice date.
- Deposit. Part of the price up front, often 25 to 50 percent, to book the work.
- Staged payments. Parts of the price at agreed points, such as start, middle and end.
- Early payment discount. A small discount for paying fast, such as 2 percent if paid within 10 days.
- Late fee or interest. A charge if payment is late, where the law and your agreement allow.
Examples you can adapt
Payment is due within 7 days of the invoice date. You can pay by bank transfer or card using the link on the invoice.
A 40 percent deposit is due on signing and books your start date. A further 30 percent is due at the halfway review, and the final 30 percent within 14 days of delivery.
Fees are invoiced on the first of each month and due within 14 days. Payment is by direct debit or card.
Invoices unpaid 14 days after the due date may be charged a late fee of [amount or rate], as allowed by law. Work may be paused until overdue invoices are paid.
How to choose
- Shorter is safer. Net 30 gives your client a month of your money. For a small business, 7 or 14 days is often fairer to you.
- Use deposits for anything big. They fund the work and show the client is serious.
- Match the work. Staged payments suit long projects, monthly invoices suit ongoing services.
- Check the law. Rules on late fees and interest differ by country, and some set legal rates or limits.
Make paying easy
The fewer steps to pay, the faster people pay. Put a payment link on every invoice, accept the common methods, and send the invoice the day the work is delivered.
When payment is late anyway
Follow up early, kindly and on a schedule. There are polite to firm templates in overdue invoice reminder emails. And write your terms into your quotes and proposals, so nobody is surprised.