The Complete Guide to Invoice Payment Terms
Payment terms are the backbone of professional invoicing. They set clear expectations about when and how clients should pay you. In this comprehensive guide, we'll explore all aspects of invoice payment terms to help you get paid faster and maintain healthy cash flow.
What Are Invoice Payment Terms?
Invoice payment terms are the conditions under which a seller will complete a sale. They specify when payment is due and may include discounts for early payment or penalties for late payment.
Common Payment Term Options
Net 30
Payment is due 30 days from the invoice date. The most common term for B2B transactions.
Net 15
Payment is due in 15 days. Used when you want to get paid faster than standard terms.
Due on Receipt
Payment is expected immediately when the invoice is received.
2/10 Net 30
A 2% discount if paid within 10 days, otherwise full amount due in 30 days.
How to Choose the Right Payment Terms
Consider these factors when setting your payment terms:
- Industry standards: What are your competitors using?
- Cash flow needs: How soon do you need the money?
- Client relationship: New clients might have stricter terms
- Project size: Large projects might need installment payments
Best Practices for Payment Terms
- State terms clearly on every invoice
- Include late payment penalties (and enforce them)
- Offer multiple payment methods
- Follow up promptly on overdue invoices
- Use Invoicessy to automate payment reminders
Ready to Create Professional Invoices With Clear Payment Terms?
Use our free online invoice generator to create customized invoices with your preferred payment terms in minutes.