Guide · Invoices · 4 min read
Net 30 vs due on receipt: which terms to put on your invoice
What each term means, when the clock starts, and the one change to your invoice that takes no negotiation at all.
· Ferrier Industries LLC
In short
- Due on receipt means payable now, and suits deposits, individuals and card payments. Net 30 means due 30 days after the invoice date, and is the norm wherever there is a finance department.
- Net 14 is a strong default for solo freelancers: short enough to protect cash flow, long enough that few clients object.
- The clock runs from the invoice date, not the day the work finished. Invoice the day you deliver.
- Whatever the term, put an explicit calendar date on the invoice. Add one payment link and send it to the person who actually pays.
Payment terms are the number of days between the invoice date and the day the money is due. There are only a handful in common use, they mean specific things, and picking the wrong one for a client type is a slow, quiet tax on your business.
The terms, defined
| Term | Means | Use it for |
|---|---|---|
| TermDue on receipt | MeansPayable immediately | Use it forDeposits, individuals, anyone paying by card |
| TermNet 7 | MeansDue seven days after the invoice date | Use it forSmall jobs for small clients |
| TermNet 14 | MeansDue in two weeks | Use it forA strong default for solo freelancers |
| TermNet 30 | MeansDue in thirty days | Use it forCompanies with a finance department |
| TermNet 60, Net 90 | MeansDue in two or three months | Use it forLarge companies with long payment cycles. Price it in |
| Term2/10 net 30 | Means2% off if paid within 10 days, otherwise full at 30 | Use it forLarge clients whose systems reward it |
One detail people get wrong: the clock runs from the invoice date (or from receipt, if the contract says so), not from the work being finished. Sending the invoice three days late means being paid three days late. Invoice the same day you deliver.
When to use each
Due on receipt
Right for deposits, for individuals, and for anyone paying by card. Wrong for anyone with an accounts payable process, where it changes nothing (their system will still schedule the invoice to its normal cycle) and can read as aggressive.
Use it on deposit invoices without hesitation. A deposit is not credit. It is the condition on which the work starts.
Net 14
A good default for most freelance work. It is short enough to protect your cash flow and long enough that few clients object. Larger clients may push back to 30, which is a fine outcome: you started from a stronger position.
Net 30
The right answer whenever there is a finance department, a purchase order, or a vendor onboarding form. Fighting for net 14 with a company whose payment run is monthly wins you nothing but an annoyed contact. Take net 30 and get the invoice in early in the cycle instead.
Net 60 and beyond
Not unreasonable to accept, but price it. Waiting an extra month to be paid is a real cost. Say so plainly: “Net 60 works, and my rate for net 60 terms is $X.” A supplier who understands their own cash flow does not offend anyone.
The change that needs no negotiation
“Net 30” asks the reader to do arithmetic, and people do not do arithmetic on a document they are skimming. A date is a deadline. A term is a policy. Put the date near the amount, in the same weight as the amount, and put both at the top of the invoice.
Two more small things in the same category:
- One payment link, not bank details in a paragraph. Every extra step is a chance for the invoice to be set aside for later.
- The invoice sent to the right inbox. The person who hired you often cannot pay you. Ask once, early: “Who should invoices go to, and do you need a PO number?”
The free invoice generator builds an invoice with the due date as a date, and Send the invoice the day the work is done is the essay on when to send it and what to do when the date passes.
Is an early-payment discount worth it?
2/10 net 30 means you give up 2% to be paid 20 days sooner. Worked out over a year, that is the same as borrowing at about 37%. On a $5,000 invoice you are handing over $100 to get the money less than three weeks early.
Worth it in one situation: when the client is large, slow, reliable, and their procurement system rewards early-payment discounts automatically. Not worth it as a way to nudge a small client who could simply have been given net 14.
Shortening terms with an existing client
Move terms at the start of a new project, never mid-project, and give the reason without apology. It is the same timing rule as raising your rates with an existing client.
Hi Alex, One thing before we start the next phase: I have moved to net 14 across the board from October. Long payment terms are the main cash-flow pressure in a small studio, and shorter terms let me keep pricing where it is. So invoices from the October kick-off onward will show a due date 14 days out. The current phase stays on net 30 as agreed. If your finance team needs anything from me to set that up, tell me what and I will get it over. Sam
The clients who cannot agree are usually constrained by a system rather than a preference, and that is worth knowing. It tells you to price the next project for a slower cycle.
The short version
- Deposits, individuals and card payments: due on receipt.
- Small businesses: net 14.
- Anyone with an accounts payable department: net 30, invoiced early in their cycle.
- Net 60 or longer: accept it, price it in, and never leave the deposit off.
- Whatever the term, show an explicit due date and one payment link.
Read next · Invoices
Freelance late fees that actually work
A late fee is a backstop. The deposit is the system.
Continue →Try PaloWorks for free
Intake, scope, rounds, change orders, invoice on one project URL. The extra round goes on the invoice.