Invoice Payment Terms Explained
Clear payment terms help clients understand when an invoice is due and when follow-up reminders are reasonable.
Common invoice terms
- Due on Receipt: payment is expected when the invoice is received.
- Net 7: payment is due 7 days after the invoice date.
- Net 15: payment is due 15 days after the invoice date.
- Net 30: payment is due 30 days after the invoice date.
Formula
Due Date = Invoice Date + Payment Terms Days
Follow-up Date = Due Date + Grace DaysPractical reminder timing
For small businesses, a simple process is often enough: send the invoice, remind the client shortly before the due date, then follow up after a short grace period. Keep the wording factual and include the invoice number, amount, due date, and payment method.
Use the tools
Use the Invoice Due Date Calculator to calculate dates, then create the document with the Invoice Generator.
FAQ
What does Due on Receipt mean?
Due on Receipt means payment is expected when the customer receives the invoice.
What does Net 30 mean on an invoice?
Net 30 means payment is due 30 calendar days after the invoice date unless the agreement defines a different method.
Should invoice reminders start on the due date?
Many businesses send a polite reminder shortly before the due date and a follow-up after a small grace period.