"Net 30", "50% upfront", "due on receipt". Payment terms are the rules for when and how you get paid, and they matter just as much as the price. Good terms protect your cash flow. Poor ones leave you funding your client's business for free.
What payment terms are
Payment terms are the conditions you set for payment: when it is due, how much is paid at each stage, which methods you accept, and what happens if the client is late. They belong in your quote, your agreement and on every invoice.
The most common terms
| Term | What it means |
|---|---|
| Due on receipt | Payment is expected as soon as the invoice arrives. |
| Net 7 / Net 14 | Payment is due 7 or 14 days after the invoice date. |
| Net 30 | Payment is due 30 days after the invoice date. Common with larger companies. |
| Deposit | A share paid before the work starts, often 30 to 50 percent. |
| Milestone payments | The price is split across stages, paid as each is delivered. |
| Retainer | A recurring fee for ongoing availability or monthly work. |
Which should you use?
- Small, one-off job: full or half payment upfront, balance on delivery.
- Medium project (a few weeks): a deposit, then the balance on delivery or in two milestones.
- Large project: deposit plus milestones tied to approved stages, never one huge payment at the end.
- Ongoing work: a monthly invoice in advance, or a retainer.
Why a deposit is your best friend
A deposit does three things. It covers your first days of work, it shows the client is serious, and it filters out people who disappear after getting a free first draft. For new clients especially, asking for one is standard practice, not rude.
Choosing the length of the term
Shorter is better for you. Seven or fourteen days is easy to justify for individuals and small businesses. Larger companies may push for 30 or even 60 days because of their internal process. If you accept longer terms, build it into your price or ask for a deposit to offset it.
Late payment terms
State what happens if payment is late. Options include a reminder schedule, pausing work, or a late fee. A fee only works if the client agreed to it before you started, so it should appear on the quote. Rules vary by country, so confirm what is allowed where you work.
How to word it
"A 40% deposit is due before work begins. The balance is due within 14 days of the invoice date. Payment can be made by bank transfer to the details below. Work may be paused on invoices more than 7 days overdue."
Be specific about dates
Instead of "30 days", write the actual due date on the invoice. A real date is difficult to misread, and gives you a precise reference point in any follow-up.
Common mistakes
- No stated terms at all, so the client chooses their own.
- Agreeing terms on a call and never writing them down.
- Waiting until the very end of a long project to ask for any money.
- Accepting long terms from a client you have never worked with.
The free tools on this site have a Notes and terms field on every invoice and quotation, so your terms always travel with the document.
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