Payment Terms Explained: Net 30, Net 60, EOM, and How to Get Paid Faster
"Net 30" is two of the most common words in business, and one of the most misunderstood. Some clients hear it and pay within a week. Others hear it and pay on day 45. A few argue that Net 30 means 30 working days, not 30 calendar days. They're all wrong, but you'll still spend the email exchange trying to explain.
This guide covers every standard payment term used on small-business invoices in 2026: what they mean, how they affect cash flow, which terms get paid fastest, and how to set terms that protect your business without scaring away clients. With real examples, country-specific late-payment rules, and the negotiation tactics that work when a client asks for Net 60.
What "payment terms" actually means
Payment terms tell the client when, and sometimes how, you expect to be paid. They sit in a small block at the bottom of the invoice or in the email body, and they form the basis of any late-payment dispute later. Without explicit terms, the default in most jurisdictions is "within a reasonable time", which sounds fair until your client decides reasonable means 90 days.
Good payment terms do three things. They set the due date in unambiguous language. They give you legal grounds to chase late payment. And they shape the client's mental priority, the difference between "we'll pay this when we get around to it" and "this is due next week".
For more on every field that belongs on a professional invoice, see our complete guide on how to make an invoice.
The standard payment terms, in plain English
Most small-business invoices use one of the terms below. Pick the one that fits your cash flow and the client relationship.
Due on receipt
The fastest possible term. Payment is expected as soon as the client receives the invoice. Used for:
- Small one-off jobs where you don't want to wait
- New clients you don't yet trust
- Cash-on-delivery situations (trades, deliveries)
Reality check: even "Due on receipt" usually gets paid within a week, not the same day. But the phrase forces the client to treat it as urgent.
Net 7 / Net 14 / Net 30 / Net 60 / Net 90
The "Net" family. The number after Net is the number of calendar days from the invoice date until payment is due. So "Net 30" on an invoice dated 5 June means payment is due 5 July.
| Term | Due date if invoiced 5 June |
|---|---|
| Net 7 | 12 June |
| Net 14 | 19 June |
| Net 30 | 5 July |
| Net 60 | 4 August |
| Net 90 | 3 September |
Net 30 is the most common default across the Western world. Net 60 and Net 90 are corporate-procurement defaults pushed by larger buyers. As a small business, push back on anything longer than Net 30 unless you've explicitly priced for the cash-flow hit.
EOM (End of Month)
Payment is due at the end of the month the invoice was issued in. An invoice dated 5 June with EOM terms is due 30 June. An invoice dated 28 June with EOM terms is also due 30 June (only two days to pay).
Used for businesses that batch payments monthly. Good for predictability if you bill on a regular cadence.
Net 30 EOM
The hybrid. Payment is due 30 days after the end of the month the invoice was issued. So a 5 June invoice is due 30 July (end of June + 30 days). A 28 June invoice is also due 30 July.
Common in UK and Irish commerce. Effectively gives the client 30-60 days to pay depending on when in the month you invoice. From your perspective, an early-month invoice gets paid almost two months later.
2/10 Net 30 (early-payment discount)
A discount-for-speed term, mostly used in the United States. Reads as: "2% off if you pay within 10 days, otherwise the full amount is due within 30 days."
| Days to pay | Amount due on a $1,000 invoice |
|---|---|
| 1-10 days | $980 (2% discount) |
| 11-30 days | $1,000 |
The discount sounds small, but on $1,000 it's $20 for paying 20 days early, which is an effective annual rate of around 36%. Good cash-strapped clients with discipline take this offer. Less common in the UK and EU, where statutory interest already incentivises prompt payment.
Custom terms
Anything else you write down. "Payment due within 45 days" is a custom term. "50% deposit, 50% on completion" is a custom term. "Payment in equal instalments over 6 months" is a custom term.
As long as the client agrees in writing (an accepted invoice counts), custom terms are valid. Just don't get creative on every invoice. Use a standard term and override only when needed.
How payment terms affect cash flow
A single invoice's payment term doesn't matter much. The pattern across all your invoices does.
If you bill 10 clients $1,000 each on the 1st of the month on Net 30 terms, your cash hits between days 25 and 45 (clients pay roughly on time but with some lag). That means working capital, salaries, and your own bills have to be covered from the 1st to the 25th out of your reserves.
Move every client to Net 14 and the same income hits between day 9 and day 25. You've effectively pulled $10,000 of float forward by two weeks. For a small business, that's the difference between needing an overdraft and not.
Payment terms are a cash-flow lever. Push for shorter terms whenever you can.
Country-specific late-payment rules
Payment terms have legal teeth in most countries. If a client pays late, you usually have statutory rights to charge interest plus fees, regardless of whether your terms say so.
- United Kingdom. The Late Payment of Commercial Debts (Interest) Act 1998 lets you charge statutory interest at 8 percentage points above the Bank of England base rate on overdue B2B invoices, plus a fixed compensation fee (£40 to £100 depending on invoice size). Applies automatically once the agreed payment period passes. See the UK invoice guide.
- European Union (EU 2011/7). The Late Payment Directive caps B2B payment terms at 60 days by default (30 days for public bodies) and gives statutory interest at the ECB rate plus 8 points, plus a minimum €40 recovery fee per overdue invoice. National implementations vary slightly. See our Ireland guide for one detailed example.
- United States. No federal late-payment law. State laws vary. Most B2B contracts rely on a contractual late-payment interest clause in your terms. Without one, you may have to sue to recover anything beyond the principal.
- Australia. No general statutory interest right but the federal Payment Times Reporting Act 2020 requires large businesses to publicly report on payment times to small suppliers, which creates social pressure. See the Australia guide.
- India. The Micro, Small and Medium Enterprises Development Act 2006 protects MSMEs: payments to registered MSMEs must be made within 45 days, with statutory interest at 3 times the RBI bank rate if delayed. See the India guide.
- South Africa. The Public Finance Management Act sets a 30-day rule for government clients. Private-sector terms are contractual but the National Credit Act protects against unreasonable clauses. See the South Africa guide.
If your client is a private business and you have explicit terms on the invoice, the law usually has your back. If your client is a public body in the UK or EU, statutory 30-day terms apply regardless of what's on the invoice.
How to choose your default terms
Three factors decide what your standard payment term should be.
Your cash flow needs. If you can't survive a 60-day gap between invoicing and getting paid, don't offer Net 60.
Industry norms. Web design and consulting tend to use Net 14 or Net 30. Trades typically use Net 7 or Due on receipt. Wholesale and manufacturing often use Net 60 or Net 90. Match the expectation in your sector so clients aren't surprised.
Client size and predictability. A long-term client with a finance department probably pays on a fixed weekly or monthly run, so a shorter Net term doesn't necessarily get you paid faster. A new client without process needs the firmest term you can set.
For most freelance and small-business work, Net 14 or Net 30 is the right default. Net 7 is reasonable for new or small clients. Net 60 should be an exception you've priced in.
How to get paid faster
Payment terms set the deadline. These tactics actually pull payment forward.
Make the due date a specific calendar date, not just "Net 30". "Payment due by 5 July 2026" is harder to forget than "Net 30". Better still, do both.
Send the invoice immediately on completion, not at month-end. Clients respect the urgency of fresh invoices. A month-end batch loses momentum.
Include the bank details and payment link on the invoice itself. Every extra click between the AP team and paying you adds delay. Bank account name, sort code, account number, IBAN, BIC, Stripe link, PayPal address, all on the invoice. See our invoice format guide for layout.
Use an early-payment discount on big invoices. 2/10 Net 30 works. The discount feels modest but the cash-flow win is real.
Reference a purchase order if there is one. If the client uses a PO system, putting their PO number on your invoice makes the AP routing automatic.
Follow up at days 1, 7, and 14 after the due date. Most overdue invoices get paid after a single polite reminder. Silence after the due date is what lets invoices age into the 60+ day pile.
Drop or raise prices for chronic late payers. A client who consistently pays 30 days late on Net 30 effectively has Net 60 terms. Either price for it or stop working with them.
When to offer or refuse a long term
If a corporate client says "our standard terms are Net 60", three options:
- Accept. Sometimes a Net 60 contract is still worth it because of total value or strategic relationship.
- Counter with a smaller change. "We can do Net 45 for this project." Often accepted without much pushback because most procurement defaults are negotiable.
- Refuse and walk. If their terms would bankrupt you, this is the right answer.
What rarely works: silently accepting Net 60 and then complaining about cash flow. The client agreed to Net 60. They're not paying late.
For small projects, refuse Net 60 outright. The negotiation cost isn't worth the size of the contract.
The bottom line
Payment terms are a small block of text that controls when money hits your account. The standard options (Due on receipt, Net 7, Net 14, Net 30, EOM, Net 30 EOM, 2/10 Net 30) cover almost every business situation. Pick a sensible default for your industry, override it for specific clients, and follow up the moment a payment passes its due date.
If you want to issue invoices with clear payment terms in seconds, Invoicara's free invoice generator lets you set custom payment terms, multi-currency, multi-tax for 10+ countries, and a clean PDF download. No sign-up, no watermark, free forever.
For more on the structure of a professional invoice, see our invoice format and layout guide. For the numbering system on your invoice, see our invoice numbering guide. And for everything else, our complete guide on how to make an invoice covers every field.