Invoice Payment Terms Explained: Net 30, Net 15, Due on Receipt
Confused by invoice payment terms? Learn what Net 30, Net 15, and Due on Receipt mean, and which terms to use with different clients.
Cash Flow Forecaster Team
Personal Finance Experts
Quick Reference: Payment Terms at a Glance
What Do Invoice Payment Terms Mean?
When you send an invoice to a client, the payment terms tell them when payment is expected. These aren't just formalities—they directly impact your cash flow.
The "Net" in payment terms refers to the total number of days the client has to pay. The clock starts ticking from the invoice date, not when the client receives or opens it.
Net 30: The Industry Standard
Net 30 means payment is due 30 days after the invoice date. If you invoice on January 1st, payment is due by January 31st.
Most common term in B2B transactions
Gives clients time to process through their accounting
Means you wait a month minimum for payment
Breaking Down Each Payment Term
Due on Receipt
Due on Receipt means payment is expected immediately when the client receives the invoice. In practice, "immediately" usually means within a few days.
When to use it:
- New clients you haven't worked with before
- Small, one-off projects under $500
- Clients with a history of late payments
- When you need cash flow quickly
Net 15
Net 15 gives clients 15 days to pay. It's a middle ground between immediate payment and the longer Net 30 standard.
When to use it:
- Established clients who pay reliably
- Smaller businesses with simpler payment processes
- When you want faster payment without seeming aggressive
- Projects with quick turnaround times
Net 30
Net 30 is the default for most business transactions. It gives clients a full month to process the invoice through their accounting department.
When to use it:
- Established business relationships
- Larger companies with formal AP processes
- When it's the industry norm in your field
- Ongoing retainer or recurring work
Net 60 (and Beyond)
Net 60 means clients have two full months to pay. Large corporations often request this—or even Net 90—because of their internal payment cycles.
Cash Flow Warning
Net 60+ terms can seriously strain your finances. If you complete work in January and invoice immediately, you might not see payment until April. Make sure you have enough runway to cover 2-3 months of expenses before accepting extended terms.
How Payment Terms Affect Your Cash Flow
Here's a real example of how payment terms impact when money actually hits your account:
You complete a $3,000 project on January 15th and invoice the same day:
That's a two-month difference between Due on Receipt and Net 60 for the same work. When you have rent due on February 1st, this difference matters enormously.
Choosing Payment Terms by Client Type
Individual Clients / Small Businesses
Smaller clients usually pay faster because they don't have complex accounting processes.
Recommended: Due on Receipt or Net 15
Mid-Size Companies
They often have accounts payable departments that process invoices on a schedule.
Recommended: Net 15 or Net 30
Enterprise / Large Corporations
Big companies often require Net 30 or longer. Factor this into your pricing.
Recommended: Net 30 (push back on Net 60+ or charge more)
Tips for Getting Paid Faster
- Invoice immediately – Don't wait. The clock doesn't start until you send the invoice.
- Make payment easy – Offer multiple payment methods (ACH, credit card, PayPal).
- Clearly state terms – Put "Payment Due: [Date]" prominently on the invoice.
- Send reminders – A friendly reminder a few days before due date can help.
- Consider early payment discounts – "2/10 Net 30" means 2% off if paid within 10 days.
Tracking Expected Payments in Your Cash Flow
The tricky part of being a freelancer is that your invoice date and payment date are different. A $5,000 invoice might feel like you have $5,000, but you don't—not yet.
This is where cash flow forecasting becomes essential. You need to see not just your current balance, but when expected payments will actually arrive based on their payment terms.
See When Payments Will Actually Arrive
Cash Flow Forecaster lets you add expected income with specific dates, so you can see your real balance projection—not just what's invoiced, but what's actually in your account.
Try Free for 14 DaysKey Takeaways
- Net 30 is the industry standard—expect most B2B clients to use it
- Due on Receipt is best for new clients and small projects
- Net 60+ requires careful cash flow planning—you'll wait 2+ months for payment
- Always match payment terms to the client type and your cash flow needs
- Invoice immediately—delays on your end mean delays in payment