Payment terms
Payment terms are the conditions that state when and how a customer must pay an invoice.
Payment terms are the rules of the deal: when payment is due, how it should be made, and what happens around early or late payment. Spelling them out clearly on every invoice sets expectations, speeds up collection, and prevents awkward disputes later. Good payment terms balance getting paid quickly with terms your clients can accept.
What it means
Payment terms define the timeframe and conditions for settling an invoice. The most visible part is the due date, often expressed as a net term like Net 30, but terms can cover much more.
They may also specify accepted payment methods, deposits or upfront amounts, late-payment fees, and early-payment discounts. Setting consistent default terms across your invoices keeps your billing predictable and your cash flow steadier.
Common payment terms
A handful of terms cover most small-business invoicing.
- Due on receipt — payment expected immediately
- Net 15 / Net 30 / Net 60 — full payment due in that many days
- Deposit or upfront — a percentage paid before work begins
- 2/10 Net 30 — a small discount for paying within 10 days
- Late fees — a charge added if payment passes the due date
Example
A consultant sets terms of "50% deposit upfront, balance Net 15." The client pays half to start the project and the rest within 15 days of the final invoice.
In Platybooks you can save a default payment term, such as Net 30, in your organization settings. New invoices then calculate their due date automatically, so your terms stay consistent without retyping them each time.
Frequently asked questions
What are the most common payment terms for small businesses?
Net 30 and due on receipt are among the most common. Many freelancers also use deposits for larger projects and shorter terms like Net 15 to get paid faster.
Can I charge late fees in my payment terms?
Yes, if you state the late fee clearly in your terms before the work, and it complies with local law. Putting it on the invoice up front makes it enforceable and avoids surprises.
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