What payment terms do
Payment terms define when payment is due and what conditions apply. They help clients understand the deadline, accepted payment methods, deposit requirements, and any late payment policy.
Good payment terms are short, visible, and consistent with the agreement you already made with the client.
Common payment terms
| Term | Meaning | Best for |
|---|---|---|
| Due on receipt | Payment is expected as soon as the invoice is received. | Small jobs, urgent work, one-off services |
| Net 7 | Payment is due within 7 days. | Freelancers and short delivery cycles |
| Net 15 | Payment is due within 15 days. | Consulting, creative work, small business services |
| Net 30 | Payment is due within 30 days. | Established clients and larger organizations |
| 50% deposit | Part of the fee is paid before work starts. | Projects with upfront labor or materials |
| Milestone payments | Payments are tied to project stages. | Long projects and retainers |
How to choose the right term
- Use shorter terms when cash flow matters or the project is small.
- Use deposits when you need to reserve time, buy materials, or reduce risk.
- Use milestone billing when a project has clear phases.
- Use Net 30 only when the client has a reliable payment history or requires it.
- Keep terms consistent with your contract, quote, or statement of work.
Example wording
Simple wording is usually best: "Payment due within 15 days by bank transfer." If you charge late fees, state the policy clearly and make sure it is allowed by your agreement and local rules.
For deposit projects, try: "50% deposit due before work begins. Remaining balance due within 7 days of final delivery."