Payment terms explained: Net 30, and negotiating

Payment terms are your agreement with the client on “how many days they have to pay”. They look like a single line on the invoice, but they directly determine how fast cash comes back. Too loose and the money drags; clear and reasonable and you get paid faster with fewer disputes.

Common term phrases

Due on receipt: payable as soon as the invoice arrives — the fastest.
Net 7 / 15 / 30 / 60: pay within 7/15/30/60 days of the invoice date. Net 30 is the most common B2B default.
Net 30, 2/10: 30-day terms, but a 2% discount if paid within 10 days (an early-payment discount).
EOM (end of month): all of a month’s invoices are settled on a set day the following month, common in long supply relationships.

How long should terms be

Balance cash flow against competitiveness:

Shorter is better from your side — the shorter the terms, the lower the DSO and the sooner cash arrives (see the DSO calculator).
But too short can scare off clients, especially larger ones with fixed payment processes.
A middle path: Net 7–15 or due-on-receipt for individuals and small clients; Net 30 for big clients who need it, with an early-payment discount to nudge them sooner.

Negotiation tips

Treat terms as negotiable, not something to accept passively:

Open short, then concede: ask for Net 15, leaving room to settle at Net 30.
Trade an early-payment discount for speed: “Net 30, 2% off if paid within 10 days” — putting the choice in their hands.
Tie big jobs to milestones: use staged payments and deposits instead of one long term.
Put it in the contract and on the invoice: a verbal agreement doesn’t count — the terms, due date and late-payment rate all need to be in writing (see are late fees legal).

Put the terms on the invoice

In the invoice generator, set the due date to a specific date (not “within 30 days”) so it’s harder to stall. However reasonable the terms, someone has to watch the due date — Duefy reminds and chases on the terms you set, so you don’t follow up by hand.