What payment terms mean

A payment term is a sentence about when money is due, compressed into a phrase that assumes everyone counts the same way. The invoice generator here offers no terms dropdown — it gives you a due-date field and a notes field. Here is what the common phrases mean, and what to put in those fields.

What “net 30” means

Net 30 means the full amount is due 30 days after the count begins. “Net” is the whole balance without deduction, as opposed to terms that shave something off for paying early; net 15, net 45, and net 60 differ only in the number. Days are normally read as calendar days, so if you mean working days, say so — net 30 working days lands about twelve days later than net 30 calendar days, and a public holiday adds another.

Thirty days from what?

This is where net 30 fails. Thirty days from the invoice date, from the day it was received, from delivery of the goods, or from the end of the month of issue — all four are in use, and a client's accounts payable process may count differently than you assumed. An invoice dated the 2nd, emailed on the 5th, opened on the 9th, and matched to a delivery note on the 11th has four defensible due dates spread across nine days. Nobody is lying; the two sides are counting from different events.

The fix is not a better abbreviation. It is a date. Write the calendar day — 14 March 2027 — and nothing is left to interpret. That is why the generator gives you a due-date field: it asks you to settle the question before the client has to. If their system expects the phrase, put both in the notes: “Net 30. Due 14 March 2027.”

Due on receipt

Due on receipt means pay now. It is reasonable for a one-off job handed over in person, or a first-time client with no history. It is less reasonable against a company with a payment run: many businesses pay approved invoices on a fixed cycle, and “due on receipt” is simply slotted into the next one. Asking for what the other side's process cannot do produces an invoice that is late on paper rather than a payment that is fast in fact.

End-of-month terms

Terms tied to the month exist because bookkeeping is done in months. “Net EOM” is read two ways — the end of the invoice's own month, or the month after — so treat it like every other ambiguity here: write the date. “15 MFI” — the 15th of the month following invoice — pins a fixed day, but unevenly: an invoice dated the 1st waits about six weeks and one dated the 30th waits about two.

Early-payment discounts: 2/10 net 30

Written 2/10 net 30 and read “two ten, net thirty”: take 2% off if you pay within 10 days, otherwise the full amount is due in 30. The arithmetic is worth seeing once. Declining the discount buys the payer 20 extra days at a cost of about 2% of the bill. Because the 2% is saved on the 98 actually paid, a year of those 20-day stretches works out near 37% — which is why finance departments take these, and why offering one is expensive.

The generator has no date-sensitive discount, because a document is a snapshot and cannot know when it will be paid. If the client takes it, either apply the discount percentage — which comes off before tax, as the methodology page sets out — or record what actually arrived in the amount-paid field.

Deposits and part payment

“50% up front, balance on completion” is a payment term too, and for a new client or a job with materials to buy it is often the right one. Where money has already arrived, enter it in the amount-already-paid field: the balance due drops by that much, and the document prints both figures, so the client sees what was credited. For work not yet agreed, state the deposit on the quote, which prices the job before anyone starts.

Late fees belong in the agreement, not the invoice

Whether you may charge interest or a fixed fee on an overdue invoice, at what rate, and from which day varies by country and often by state or province. Some places grant a statutory right to interest on late commercial payments, some cap what is enforceable, and consumer transactions are often treated differently from business ones. This site is not advice on any of that, and the tool applies no rule of its own — a late fee appears only if you type it as a line item.

What does generalize is the sequence. A fee that first appears on the invoice, after the work is done, is easy for the client to dispute and hard to defend. The same fee written into the quote or the engagement email was agreed before the work began. Put the terms in writing at the start, then check what your jurisdiction permits before relying on them.

Choosing a term

• New client, no history: deposit up front, or payment on delivery.
• Small job handed over at once: due on receipt.
• Client with an accounts payable department: net 30, and ask which day the payment run falls on so the due date lands before it.

Whichever you pick, the document has to say it plainly. Put the calendar date in the due-date field on the invoice generator and the phrasing in the notes; what to put on an invoice covers the other fields.