When you send an invoice, the payment terms you set determine when your client is expected to pay. Understanding payment terms — and choosing the right ones — can make a significant difference to your cash flow as a freelancer or small business owner.
What Do "Net" Payment Terms Mean?
"Net" in payment terms means the total amount is due — no discounts, no deductions. "Net 30" simply means the full invoice amount is due within 30 calendar days of the invoice date. The "30" refers to the number of days, not weeks or months.
Common Payment Terms Explained
Due on Receipt
Payment is expected immediately upon receiving the invoice. This is typical for: one-off small transactions, services already paid upfront, or retail/e-commerce. As a freelancer, this is difficult to enforce for project-based work, but it's ideal for small consultations or hourly sessions.
Net 7
Payment due within 7 days of the invoice date. Suitable for: small projects, rush work, or clients you've worked with before. 7 days doesn't give clients much processing time, so it works best with smaller invoices that don't require internal approval processes.
Net 14
Payment due within 14 days. A good middle ground for smaller projects or ongoing retainer billing. Many sole traders and small agencies use Net 14 as their standard term.
Net 30
Payment due within 30 days. This is the most common standard in UK and US business. It gives corporate clients enough time to process invoices internally. As a freelancer, Net 30 is reasonable for larger projects, but it means you could wait a month for payment after delivery.
Net 45 and Net 60
Payment due within 45 or 60 days. These are common for large corporations or government contracts. For freelancers, accepting Net 60 means you may complete a project and wait two months for payment — a serious cash flow challenge. Always try to negotiate shorter terms or a deposit upfront.
Net 90
Payment due in 90 days. Avoid these if at all possible as a small freelancer. In the UK, the Prompt Payment Code (a voluntary code for large companies) sets a maximum of 60 days for most suppliers.
Early Payment Discounts
Some invoices include an early payment discount to incentivise faster payment. The notation looks like: 2/10 Net 30, which means: a 2% discount if paid within 10 days, otherwise the full amount is due within 30 days.
This can work well for freelancers who prefer cash sooner even at a small discount. Calculate whether the cash flow benefit outweighs the reduction in income.
Which Payment Terms Should You Use as a Freelancer?
As a general rule:
- For small projects (under £500/$500): Due on receipt or Net 7
- For medium projects: Net 14 with a 50% deposit upfront
- For large projects: Milestone-based payments (e.g., 30% on signing, 30% at midpoint, 40% on delivery) or Net 30 with deposit
- For retainers: Monthly in advance or Net 7 from the monthly invoice date
The Importance of a Deposit
Regardless of your payment terms, always require a deposit before starting work — typically 25–50% of the total fee. A deposit:
- Confirms the client is serious about the project
- Covers your time if the client disappears
- Improves your cash flow during the project
- Gives you legal leverage: if you've started work and the client cancels, you've already been partly paid
What Happens When Clients Pay Late?
If a client misses your payment deadline, you're entitled to charge late payment interest. In the UK, the Late Payment of Commercial Debts Act 1998 automatically entitles you to 8% above the Bank of England base rate. In the US, your right to interest depends on what's in your contract and your state's laws.
Use our Late Payment Interest Calculator to calculate exactly what you're owed. Use our Invoice Due Date Calculator to determine when an invoice becomes overdue.
How to Put Payment Terms on Your Invoice
Your invoice should clearly state:
- Invoice issue date
- The specific due date (not just "Net 30" — write the actual date)
- Your bank details or payment method
- Late payment interest clause (e.g., "Interest will accrue at 8% p.a. on overdue amounts")
Calculate Your Invoice Due Date
Enter your issue date and payment terms for an instant due date calculation.
Calculate Due Date →Frequently Asked Questions
What does Net 30 mean on an invoice?
Net 30 means the full invoice amount is due within 30 calendar days of the invoice date. "Net" means no discounts — the total amount is owed. The number refers to calendar days, not business days.
Which payment terms should freelancers use?
For small projects, use Due on Receipt or Net 7. For medium projects, Net 14 with a 50% deposit. For large projects, milestone-based payments or Net 30 with a deposit. For retainers, monthly in advance or Net 7 from the monthly invoice date.
Can I charge interest on late invoices?
Yes. In the UK, the Late Payment of Commercial Debts Act automatically entitles you to 8% above the Bank of England base rate. In the US, your right to interest depends on your contract terms and state law. Always include a late payment clause in your contracts.
Should I always require a deposit before starting work?
Yes. A deposit of 25–50% before starting work is standard practice. It confirms the client's commitment, covers your time if they cancel, improves cash flow, and gives you leverage if payment disputes arise.
What is an early payment discount?
An early payment discount (e.g., 2/10 Net 30) offers a small reduction — typically 1–2% — if the client pays within a shorter period instead of the full term. It incentivises faster payment in exchange for a slightly reduced invoice total.