Payment Terms Explained, With a Due Date Calculator

What each term means

Common invoice payment terms, what they mean and who uses them
Term	Days	Meaning	Typically used for
Due on receipt	0	Payable as soon as it arrives.	Small jobs, new clients, one-off work.
Net 7	7	Due one week after the invoice date.	Short engagements where cash flow matters.
Net 14	14	Due two weeks after the invoice date.	The common default for freelancers and small suppliers.
Net 30	30	Due 30 days after the invoice date.	The most widely used business-to-business term.
Net 60	60	Due 60 days after the invoice date.	Large organisations. At the outer edge of what EU rules treat as normal.
2/10 net 30	30, or 10 for the discount	2 percent off if paid within 10 days, otherwise the full amount in 30.	Encouraging early payment when you would rather have the cash than the margin.
EOM	End of month	Due at the end of the month the invoice was issued in.	Clients who run one payment cycle a month.
15 MFI	15th of the following month	Due on the 15th of the month after the invoice date.	Aligning with a fixed accounts-payable run.

Why the day of the week matters

Payment terms count calendar days, so a term picked without looking at a calendar routinely lands on a Saturday. Most finance teams run payments on fixed weekdays, so a due date on a weekend is in practice a due date on the following Monday or later. Over a year of monthly invoicing that quietly costs you several days of cash flow for no reason. The calculator above shows the weekday for exactly this reason; if your term lands badly, move it by a day or two rather than absorbing the drift.

What happens if you name no term

Leaving the term off does not create a flexible arrangement, it hands the question to the statutory default. In the United Kingdom, where no date has been agreed, payment is treated as late 30 days after the customer receives the invoice or 30 days after the goods or services were supplied, whichever is later, and GOV.UK sets out that position along with the right to charge statutory interest and recovery costs once a payment is late.

Within the EU, Directive 2011/7/EU on combating late payment sets comparable defaults for commercial transactions and addresses how long a business-to-business payment period may run before it needs express agreement. The practical takeaway is the same in both: naming a term on the invoice removes an argument you would otherwise have to have later.

Choosing a term that gets paid

Shorter than you think. Net 30 is a convention, not an obligation. A solo supplier has no reason to lend a month of working capital by default.
Say it twice. Put the due date in the totals block and in the email subject line. A due date the client never read is functionally not a due date.
Send the same day. The clock starts at the invoice date, so an invoice written on the 1st and sent on the 12th has already spent a third of a Net 30 term sitting in your drafts.
Write the payment method next to the term. Bank details, reference, and what you want quoted on the transfer. The fewer questions the invoice raises, the fewer weeks it waits.

When you are ready, set the term in the invoice generator: the due date field takes the date the calculator above works out, and the notes field is where the payment instructions belong. If you are billing the same client every month, the recurring invoice guide covers keeping the term consistent across periods.

Sources

Every legal requirement on this page comes from the authority that publishes it. Dates below are the day we last opened each page.

Frequently asked questions

What does Net 30 mean on an invoice?

Payment is due 30 days after the invoice date. Net 7, Net 14 and Net 60 work the same way with a different number of days. Due on receipt means immediately. The count runs in calendar days, not working days, unless your contract says otherwise, so a term can land on a weekend.

What does 2/10 net 30 mean?

The full amount is due in 30 days, but the customer may take 2 percent off if they pay within 10 days. It is an early settlement discount. Work out whether the discount costs you less than waiting: giving up 2 percent to be paid 20 days sooner is expensive money if you did not need the cash that badly.

What happens if I do not put a payment term on the invoice?

You do not get an open-ended arrangement, you get the statutory default. In the UK, if no date is agreed, the law treats payment as late 30 days after the customer receives the invoice or the goods or services, whichever is later. In the EU the Late Payment Directive sets a comparable default. Naming a term is still better, because it removes the argument entirely.

How long a payment term can I agree with a business customer?

In the EU, business-to-business payment periods should generally not exceed 60 days, and a longer term is only permissible where it is expressly agreed and not grossly unfair to the creditor. The UK applies comparable limits. This describes the published rules; whether a specific term is enforceable in your contract is a legal question.

Should a freelancer use Net 30?

Usually not by default. Net 14 is common for solo suppliers and there is no rule requiring anything longer. The term is a negotiation, not a standard you have to accept, and the shorter it is the less of your own money you are lending to a client.

Invoice payment terms