What Are Payment Terms?

Payment terms are the conditions you set on an invoice that specify when payment is due and how it should be made. They are an agreement between you and your client about the timing of payment. Common payment terms used in the US include Due on Receipt which means payment is expected immediately upon receiving the invoice, Net 15 which gives the client 15 days from the invoice date to pay, Net 30 which gives 30 days and is the most common US business standard, and Net 45 or Net 60 which are typically used only in larger enterprise transactions. As a freelancer or independent contractor you have the right to set your own payment terms. You do not need to default to Net 30 simply because it is common. Many contractors use Net 15 as their standard term, especially with new clients. Some use Due on Receipt for project completions where the final deliverable is already in the client hands.

Payment terms should always be stated clearly on every invoice you send. Vague language like please pay promptly is not enforceable. Net 15 or Payment due within 15 days of invoice date leaves no ambiguity. If you charge late fees, state those terms in the same place so clients are informed before the due date passes.