Payment Terms
Also known as: payment deadlines · invoice terms
Definition
Payment terms specify when and how a client must pay an invoice. Common terms include 'Due on Receipt' (pay immediately), 'Net 15' (pay within 15 days), and 'Net 30' (pay within 30 days of the invoice date).
Detailed Explanation
Payment terms directly impact your cash flow. Due on Receipt means the client should pay immediately upon receiving the invoice — best for new clients or small projects. Net 15 gives them 15 days — a good balance for ongoing relationships. Net 30 gives 30 days — common for large corporate clients with formal AP processes. Some freelancers use a 50% upfront + 50% on delivery split for large projects, reducing risk on both sides. Late payment penalties (e.g., 1.5% per month after the due date) are legal in most jurisdictions and motivate on-time payment. AI bookkeeping tools can automatically track which invoices are approaching or past their due dates.
Freelancer Example
A freelance copywriter sets Net 15 terms for a new client as a middle ground — faster than corporate Net 30 but giving the client reasonable processing time. The invoice is sent on March 1, payment is due March 16, and the client pays on March 14.