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Payment Terms Explained (Net 30, Net 60, Due on Receipt)

What Net 30, Net 60, and Due on receipt actually mean, how they get counted, and how to pick terms that get you paid on time.

Payment terms are the line on an invoice that says when you expect to be paid, and they matter more than they look — a vague or missing term is one of the easiest ways for a payment to arrive late, since "as soon as possible" means something different to you than it does to your client.

"Net" terms count a fixed number of days from a starting point to the day payment is due: Net 15 means due 15 days after that point, Net 30 means 30 days, Net 60 means 60. Net 30 is the most common default in day-to-day B2B invoicing — a convention, not a rule, but a useful one to know if a client asks for it.

Not every business counts "net" the same way. The default assumption is that the days count from the invoice's issue date, but some count from the date goods or work were delivered instead, and some invoices use "EOM" terms, counting from the end of the month the invoice falls in. If it matters, state explicitly what your net days count from rather than leaving it to be assumed.

Other common terms: "Due on receipt" (payable immediately, no grace period — normal for smaller jobs, retail, or a new client without an established payment history); a deposit split like "50% due on acceptance, balance due on completion"; and early-payment discounts like "2/10 Net 30" (2% off if paid within 10 days, full amount due by day 30) — a standard construct in wholesale, less common for solo-operator invoicing.

Shorter terms protect your cash flow; longer terms can help win larger or more established clients who expect them. For a new relationship, a shorter term — Due on receipt or Net 15 — is the safer default. It's easier to extend payment terms once you trust a relationship than to shorten ones you've already offered.

What you can actually do about a late payment varies by jurisdiction and by what you agreed to. Some places give businesses a statutory right to charge interest on a late commercial payment — the UK's Late Payment of Commercial Debts Act is one example — while others leave it entirely to what's written on the invoice or in a contract. Don't assume you can add a late fee unless you've stated one up front or checked your local rules; "the terms say Net 30" is not the same as "the terms say what happens after Net 30."

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Frequently asked questions

What does Net 30 mean?
Payment is due 30 days after the invoice's issue date, unless you've stated the days count from delivery or another date instead. It's the most common default payment term in B2B invoicing, not a legal requirement.
Is Net 30 better than Due on receipt?
Neither is universally better. Due on receipt gets you paid faster and suits smaller jobs or new clients; Net 30 is the expected norm for established B2B relationships and larger clients whose own accounts-payable process runs on a monthly cycle. Pick based on your cash-flow needs and what the client will actually accept.
Can I charge a late fee if a client misses Net 30?
Only if you've stated one on the invoice or in an agreement, or your jurisdiction gives you that right automatically for commercial debts — this varies by location, so check your local rules rather than assuming. State a late-fee policy on the invoice up front rather than adding one after the fact.
What does EOM mean on an invoice?
End of month — payment terms like "Net 30 EOM" count the 30 days from the end of the month the invoice was issued in, not from the invoice date itself, which effectively extends the deadline for invoices issued early in the month.