Payment terms

Payment terms are the part of a contract that covers money. They usually set the fee, whether a deposit is due, when you invoice, how many days the client has to pay, and what happens if they do not. Everything else in the paper is easier to keep calm if this section is specific.

The due-date line is often written as Net 14, Net 30 or Net 60. The contract should also say whether unused hours roll over, whether expenses are extra, and which currency and bank details apply. A statement of work that lists a fee with no invoice trigger is how people invent “we thought it was on launch” in week eight.

People commonly negotiate the deposit size, the net period, milestone billing, and a pause if an invoice is overdue. A late fee is one option; a right to pause the work is another. Freelancers who cannot face a late-fee argument often get further with a pause and a larger deposit.

In the UK, statutory interest on late commercial debts is set 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. Contracts often set their own rate instead. This page does not tell you which to use; it only notes that the sourced statutory rate exists if you want the usual wording.

Agencies that reuse a master services agreement should put the payment habit in the master and the actual numbers in each statement of work: the fee, the milestones, the deposit for that job. If the two papers disagree, the order of precedence clause is what decides which one finance follows.