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.

The two routes produce different documents, and the engine makes the difference visible. Take an invoice from Larkspur Studio to Ridgeway Signs with two lines — brand guidelines at $3,000.00, and 4 stock-photography licences at $85.00 each, $340.00 for the line — with tax added on top at an example rate of 10%. With no discount the subtotal is $3,340.00, the tax $334.00, and the total $3,674.00.

Route one applies the discount. The discount field accepts “2%” as readily as “2” — the engine reads both as 2 — and takes it off the subtotal before tax: discount $66.80, taxable base $3,273.20, tax $327.32, total $3,600.52. Record that total in the already-paid field and the balance due is $0.00. Notice the tax fell from $334.00 to $327.32: the discount comes off first, so the tax is computed on what was actually charged.

Route two leaves the price alone and records what arrived. The client pays $3,600.52 — the total less 2% — and that figure goes into the already-paid field. The engine now prints three figures: a total of $3,674.00, an amount paid of $3,600.52, and a balance due of $73.48. That is not an error; it is arithmetic on what it was given. The engine cannot know the shortfall was a discount you offered, so the document says money is still owed. Route two is the record of a shortfall, not of a discount; to show the discount, apply it. The amount the client pays under route two happens to agree to the cent with route one's total in this example — $3,600.52 either way — but the printed total, tax and balance do not.

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.

Here is that sequence as the engine builds it. Fenwick Joinery quotes Brightwater Café two lines — oak shelving, supply and fit, at $2,400.00, and a site survey at $150.00 — with “50% deposit on acceptance, balance on completion” in the notes. The quote's bottom line is labelled “Quote total” and reads $2,550.00; the engine ignores any amount paid on a quote, so nothing on it reads as owed. With the number field left blank, the quote numbers itself from its date as QTE-20270214.

The café accepts and pays half, $1,275.00. On the invoice for the job — the same two lines, with $1,275.00 typed into the already-paid field — the engine computes a total of $2,550.00, records $1,275.00 as paid, and prints a bottom line labelled “Balance due” of $1,275.00: total minus paid, nothing else. The already-paid field is read only on an invoice, which is why the receipt and quote generators do not offer it.

The deposit itself gets a receipt: one line for the deposit at $1,275.00, dated 20 February 2027, with “Bank transfer, ref 2207” in the paid-by field. Its bottom line is labelled “Amount paid” and is the document total, $1,275.00. A receipt has no balance due because it asserts that nothing is owed: the input for this one carried an amount paid of $1,275.00, and the built document records $0.00 against that field, because the engine drops it for a receipt. The bottom-line label guide sets out what each of the three labels claims and why the wording is not left to you.

When the balance arrives, the same invoice rebuilt with $2,550.00 in the already-paid field shows a balance due of $0.00. Overpay it — $2,570.00 against a total of $2,550.00 — and the balance due is still $0.00, never a negative figure: the engine floors the balance at zero and has no concept of a credit owed back. The already-paid field also refuses a negative entry — typed as -50 it answers “Amount paid cannot be negative.” — so a refund cannot be expressed as a payment of less than nothing. What the field does accept is money as people type it: “$1,250.00” is read as $1,250.00, and the comma-decimal “1.250,00” as $1,250.00.

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.

A typed fee gets no special treatment. Suppose 10 hours of consulting at $120.00 and a second line reading “Late payment fee, as agreed in the quote” at $60.00: the engine computes the consulting line as $1,200.00, adds the fee line like any other, and reaches a subtotal of $1,260.00. It has no idea the second line is a fee, and that shows up under tax: with tax added on top at an example rate of 5%, the tax on the two lines is $63.00, against $60.00 for the consulting line alone. The fee sits inside the taxable base because every line does; there is no per-line tax switch. The tool does not decide whether a fee attracts tax where you are — it applies the mode you chose to every line on the page.

What the document prints for a due date

The invoice generator's second date is the due date; on a quote the same field is the valid-until date, and on a receipt the paid-on date. The engine takes a calendar date in year-month-day form and prints it out in full. The deposit invoice above, dated 14 February 2027, carries its due date as 16 March 2027 — thirty days on, counted from the invoice date, because that is the only date the engine has. It knows nothing about when the document was sent, received, or matched to a delivery; the ambiguity described above is resolved by you choosing the day, not by the tool.

Two checks run before a document is built. Both dates must be real calendar dates, and the second cannot precede the first: an invoice dated 16 March 2027 with a due date of 14 February 2027 is refused with “The second date cannot be before the document date.” The same check applies to a receipt's paid-on date and a quote's valid-until date — the second date may equal the first, but never fall before it. Leave the field empty and no second date is printed at all, so an invoice without one has said nothing about when.

The phrasing goes in the notes, which hold up to 600 characters; a note one character longer is refused with “Notes are limited to 600 characters.” Payment instructions, the term, and a purchase-order reference all fit, and so does a quote's “deposit on acceptance”. The currency symbol on the document is one of 10 labels and converts nothing, so if the figures are in a currency the client might not assume, say so in the same notes.

What the generator does and does not do here

Everything above is a document generator doing arithmetic on the fields in front of it. It computes the balance due as the total less the amount paid, floored at zero. It prints the dates you choose, labels the bottom line for the kind of document, and holds every figure in whole cents so the printed lines reconcile with the printed subtotal — the totals guide walks the order of operations line by line, and the methodology page is the reference.

It does not track payment: nothing is stored, so it cannot know that last month's invoice was paid, send a reminder, or work out what is overdue. It applies no interest, no late fee, and no date-sensitive discount of its own. It does not number documents across sessions — the default number is built from the date, and how to number invoices covers keeping your own register. It applies no jurisdiction's rules on terms, fees, or tax. A discount can be at most 100%: it can bring the goods and the tax on them to zero, never below it, and shipping sits outside the base the discount is taken from. Where tax is already inside your prices, the inclusive-tax guide shows how the engine extracts it, and sales tax vs. VAT explains which shape is which. Which document to send at each step of a job is covered in invoice vs. receipt vs. quote, and the full list is on the guides page.

Questions about terms and the generator

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.