Net 30, net 14, on receipt: payment terms in plain words

In one line. Net 30 means the full amount of an invoice is due 30 days after a stated starting point, usually the invoice date.

"Net" means the whole amount, with no discount for early payment. The number is the days allowed. It is shorthand that comes from accounting, so contracts commonly spell it out rather than rely on the abbreviation.

They are the same idea with different numbers:

• Due on receipt. Payable as soon as the invoice arrives. In practice, most clients pay within a few days or treat it as their standard run.
• Net 7 / net 14. Common for freelancers and small studios, and for deposits.
• Net 30. A common default in business-to-business work.
• Net 60 / net 90. Common in large-company procurement. Worth noticing before agreeing a fee, because it changes the cash cost of the work.
• 2/10 net 30. A 2% discount if paid within 10 days, otherwise the full amount within 30.
• 30 EOM. 30 days after the end of the month the invoice is issued in, which can mean almost 60 days in practice.

This is where most disputes sit. Common starting points:

• the invoice date
• the date the client receives the invoice
• the date the work is accepted
• the end of the month

"Net 30 from acceptance" can be much longer than "net 30 from invoice" if acceptance has no deadline. If the contract uses acceptance, it helps to say what counts as acceptance and what happens if the client says nothing, for example deemed acceptance after 5 working days.

Days are usually calendar days unless the contract says "business days" or "working days". Saying which avoids the question.

Large clients add one more step: a purchase order. Many finance teams will not pay an invoice that does not quote a valid PO number, and the clock in practice starts only once one is issued. If the client works this way, it helps to ask for the PO before starting and to put its number on every invoice. That is an admin step, not a legal one, but it is behind a large share of invoices that arrive late without anyone deciding to pay late.

For business-to-business debts in the UK, statutory interest on late payment is set by order under the Late Payment of Commercial Debts (Interest) Act 1998, and gov.uk states the rate as 8% plus the Bank of England base rate (Late Payment of Commercial Debts (Interest) Act 1998, s.6; gov.uk guidance).

Many contracts mention the Act by name, so both sides know the rate is in play. Some set their own contractual rate instead. gov.uk's late payment guidance covers how a claim is made.

For the US, interest on late invoices depends on the contract and on state law. We have not verified a state rule against an official source, so this is pending verification and not covered here.

A clear clause answers five things: how much, when it is invoiced, when it is due, how it is paid, and what happens if it is late.

Example

The Client will pay each invoice in full within 14 days of the invoice date, by bank transfer to the account shown on the invoice. Invoices are issued on signature (50% deposit) and on delivery (50% balance). If an invoice is unpaid 7 days after its due date, the Supplier may pause work until it is paid. Late sums carry interest under the Late Payment of Commercial Debts (Interest) Act 1998.

In Plain English: half up front, half on delivery, two weeks to pay, and work can stop if an invoice goes a week overdue. The payment terms clause page has more variations.

A few related lines make payment terms work in practice:

• Deposits. Common for new clients and fixed-fee work.
• Milestones. Payment tied to delivery stages rather than dates.
• Kill fee. What is paid if the client cancels part-way.
• Expenses. Whether they are included, capped or billed at cost.
• Suspension. The right to pause work, as in the example above.

A retainer usually flips the timing: payment in advance each month for capacity, rather than in arrears for work delivered.