Payment Terms Explained: Net 15, Net 30, Due on Receipt
Updated 2026-07-24
“Net” terms state how many calendar days after the invoice date full payment is due: Net 15 means within 15 days, Net 30 within 30 days, Net 60 within 60 days. “Due on receipt” means payment is expected immediately upon receiving the invoice. Shorter terms get you paid sooner but larger clients often expect Net 30, so many small businesses pair the longer term with a deposit up front and automated reminders around the due date.
The common terms, defined
| Term | Meaning | Typical use |
|---|---|---|
| Due on receipt | Payment expected immediately when the invoice arrives | Small jobs, retail-like work, first-time clients |
| Net 7 / Net 15 | Full payment within 7 or 15 calendar days of the invoice date | Freelancers and small businesses that need cash flow |
| Net 30 | Full payment within 30 calendar days of the invoice date | The default in most B2B; what larger clients’ payables expect |
| Net 60 / Net 90 | Full payment within 60 or 90 days | Large enterprises; hard on a small supplier’s cash flow |
| 2/10 Net 30 | 2% discount if paid within 10 days; otherwise full amount in 30 | Trading a small discount for early cash |
Choosing terms: cash flow vs friction
Shorter terms mean faster cash but can read as distrust to corporate clients whose payment runs are built around Net 30; longer terms win big-company work but make you their bank for a month or three. Practical middle ground: due on receipt or Net 7–15 for consumers and small clients, Net 30 where the client’s process demands it — softened by a deposit collected before work starts, so the term applies only to the balance. Whatever you choose, print it on the invoice as both the term and the actual date; “Net 30” invites arithmetic, “Due August 23” invites payment.
Late fees: the etiquette that actually works
A late-fee clause works mostly as a deterrent, and it only works when disclosed before the work — on the estimate and the invoice, never sprung afterward. Keep it modest and conventional (commonly around 1–2% per month where local law allows), and treat enforcement as an escalation step, not a reflex: a good client who slipped once is worth more than one month’s fee. Automated reminders that escalate from polite to final notice recover most late invoices before a fee is ever needed.
Frequently asked questions
- What does Net 30 mean on an invoice?
- Full payment is due within 30 calendar days of the invoice date.
- What does “due on receipt” mean?
- Payment is expected immediately when the client receives the invoice, not after a waiting period.
- Can I charge a late fee?
- Commonly yes, where local law allows — but only if the fee was disclosed on your terms before the work, and modest rates around 1–2% per month are the convention.
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