Invoice Payment Terms Explained: Net 30, Net 15, Due on Receipt

Quick reference table

Term	Notation	Payment expected	Typically used for
Net 30	Net 30	30 days after the invoice date	Standard B2B terms with established clients
Net 15	Net 15	15 days after the invoice date	Shorter-cycle work, smaller invoices, faster turnaround
Net 7	Net 7	7 days after the invoice date	Short gigs, new clients you're still building trust with
Net 60	Net 60	60 days after the invoice date	Larger companies with slow accounts-payable processes
Due on receipt	Due on receipt	Immediately, as soon as the invoice arrives	One-off jobs, new clients, no payment history yet
Prepayment	CIA (cash in advance)	Before work starts or goods ship	Custom work, high-risk or first-time clients
50% upfront	50% upfront, balance on delivery	Half before work starts, half on completion	Larger projects, agency or freelance work with real cost exposure
Early payment discount	2/10 Net 30	Full amount in 30 days, or 2% off if paid within 10 days	Sellers who want to speed up cash flow by rewarding early payers
End of month	Net 30 EOM	30 days after the end of the month the invoice was dated in	Companies that batch-process payables once a month

None of this is legal or tax advice. It's a plain-language explanation of what these terms conventionally mean, not a statement of what you're legally entitled to.

What payment terms actually are

Payment terms are the part of an invoice that says when (and sometimes how) you expect to get paid. Without them, "please pay this invoice" leaves a client to decide their own timeline, and you lose the one thing you'd otherwise be able to point back to if a payment runs late: a date you both agreed to.

Net 30, Net 15, Net 7, Net 60: what "net" means

"Net" here means the full amount due, with no discount attached, as opposed to a discounted amount if paid early (that's what the "2/10" in "2/10 Net 30" is for, covered below). The number after it is simply the number of days the client has to pay in full. Net 15 is 15 days, Net 60 is 60 days, and so on.

The part that actually causes disputes is where the clock starts. Most invoicing software and most businesses default to counting from the invoice date (the date printed on the invoice, i.e. when it was issued or sent) rather than the date it happened to land in the client's inbox or mailbox. That's a convention, though, not a universal rule, and not every client reads it the same way. If the gap between "issued" and "received" matters to you (it usually does once an invoice sits unopened for a week), spell it out on the invoice itself: "Net 30 from the date of this invoice" removes the ambiguity entirely.

Due on receipt

"Due on receipt" drops the grace period altogether: payment is expected as soon as the invoice arrives, not some number of days later. It's common for small one-off jobs and for clients you don't yet have a payment history with, since it doesn't leave room for "I forgot" to turn into a month-long wait.

CIA (cash in advance), prepayment, and 50% upfront

CIA (cash in advance) and prepaymentmean the same thing: the client pays the full amount before you start the work or ship anything. It's the least risky option for you and the most common choice for custom work, high-risk clients, or a first-time client you have no track record with.

50% upfront splits the difference: half is paid before work begins, the rest on delivery or completion. It's common on larger freelance or agency projects, where it covers your own up-front costs and limits how much you're exposed to if a client disappears partway through.

2/10 Net 30 and other early payment discount notation

This notation follows a pattern: x/y Net z. The first number is the discount percentage, the second is how many days the client has to pay to earn it, and "Net z" is the normal full-amount due date if they don't. So 2/10 Net 30 reads as: take 2% off if you pay within 10 days, otherwise the full amount is due within 30. You'll also see variants like 1/10 Net 30 or 3/15 Net 45: same pattern, different numbers.

End of month (EOM) and Net 30 EOM

EOM ties the due date to the end of the calendar month the invoice was issued in, rather than to the invoice's exact date. Net 30 EOM means 30 days after that month-end. For example, an invoice dated 12 March would have an EOM date of 31 March, so Net 30 EOM would fall due on 30 April. This is common with companies that batch-process all their payables once a month rather than tracking each invoice's individual date.

Which terms fit which situation

New client, no payment history: due on receipt, CIA/prepayment, or 50% upfront reduces the risk of chasing a first invoice.
Regular, established client: Net 15 or Net 30 is standard practice and signals an ordinary business relationship.
Small one-off job: due on receipt or Net 7 keeps cash flow tight without feeling out of place for a small amount.
Large project or bigger client: 50% upfront with Net 30 on the balance is common, or Net 60 if the client is a larger company with a slower accounts-payable process.
Slow-paying regulars: an early payment discount like 2/10 Net 30 can nudge them to pay sooner without changing your standard terms.

If a client doesn't pay by the due date

A few practical steps, in roughly the order most people take them:

Send a reminder that references the invoice number and the payment terms you both agreed to: a simple pointer back to the date is often enough on its own.
If your invoice or contract allows for late interest, use the freelate payment interest calculator to work out the interest accrued and the new total due, with every step shown.
For clients who are repeatedly late, consider adjusting future terms (a deposit, a shorter Net period, or due on receipt) rather than repeating the same chase every time.

This is general practice, not legal advice. What you're actually entitled to charge or claim depends on your contract and your local rules. Check those directly rather than relying on this page.

Frequently asked questions

What does “Net 30” mean?

It means the full invoice amount is due 30 days after the invoice date. There's no discount for paying early unless the invoice separately states one, like “2/10 Net 30.”

Does Net 30 start from the invoice date or the date the client receives it?

Convention is usually the invoice date (the date printed on the invoice), but this isn't a strict rule, and it's the single biggest source of Net 30 disputes. If it matters, spell it out on the invoice itself, e.g. “Net 30 from the date of this invoice.”

What does “2/10 Net 30” mean?

It's an early payment discount: pay within 10 days and take 2% off the total; otherwise the full amount is due within 30 days.

What's the difference between “due on receipt” and “Net 30”?

“Due on receipt” means payment is expected as soon as the invoice arrives, with no grace period. “Net 30” gives the client 30 days from the invoice date to pay.

What does “EOM” mean on an invoice?

EOM stands for “end of month.” It ties the due date to the end of the calendar month the invoice was issued in, rather than the invoice's exact date. “Net 30 EOM” means 30 days after that month-end.

What should I do if a client hasn't paid by the due date?

Send a reminder referencing the invoice number and the stated terms, and if your invoice or contract allows for late interest, use a late payment interest calculator to work out what's owed. This isn't legal advice. Check your own contract and local rules for what you're entitled to do.

Invoice Payment Terms Explained