Payment Terms Explained: Due on Receipt, Net 14, Net 30 and More
Payment terms tell the client when the money is due. Clear terms are one of the simplest ways to reduce late payments.
By the Invoice Faster team at Digimarket Group SIA · Updated 3 November 2026
Common terms and what they mean
| Term | Meaning |
|---|---|
| Due on receipt | Payment is expected as soon as the invoice arrives. In practice many clients still take a few days. |
| Net 7 / Net 14 | Payment due 7 or 14 days after the invoice date. Common for freelancers and small jobs. |
| Net 30 | Payment due 30 days after the invoice date. Very common in B2B. |
| Net 60 / Net 90 | Longer terms some large companies ask for. They tie up your cash for months. |
| EOM (end of month) | Due at the end of the month in which the invoice is issued; “Net 30 EOM” means 30 days after that month end. |
| 2/10 Net 30 | A 2% discount if paid within 10 days, otherwise the full amount within 30 days. |
| CIA / deposit | Cash in advance, or a percentage up front before work starts. |
Always write the actual date
“Net 14” forces the reader to calculate. Writing “Due: 17 November 2026 (Net 14)” removes any doubt about when the term started. Invoice Faster has a Due Date field for exactly this.
How to choose terms
- New client, small project: a deposit plus Net 7 or Net 14 limits risk.
- Ongoing client with a good record: Net 14 or Net 30 is reasonable.
- Large company that insists on Net 60: consider pricing in the wait, asking for milestone payments, or a deposit.
- Consumers (B2C): payment on or before delivery is typical.
Legal limits
Some jurisdictions limit how long B2B terms can be. In the EU, the Late Payment Directive (2011/7/EU) generally sets 60 days as the maximum for business-to-business terms unless expressly agreed and not grossly unfair, and 30 days for public authorities in most cases, and it gives creditors a right to statutory interest and a fixed €40 compensation for recovery costs. National laws implement the details, so check your own country’s rules.
Early-payment discounts
A discount such as 2/10 Net 30 can speed up payment, but it costs you real money: 2% for paying 20 days earlier is expensive over a year. Use it only if cash flow matters more to you than margin, and show both the discounted and full amounts clearly.
Late fees
Late fees or interest are most enforceable when they were agreed in the contract before work started. Adding them for the first time on an overdue invoice tends to damage the relationship and may not be enforceable. Our reminder templates show how to refer to agreed terms politely.