What does Net 30 mean on an invoice?

It means payment is due 30 days after the invoice date. An invoice dated 1 March on Net 30 terms is due on 31 March.

What does due on receipt mean?

It means the customer should pay as soon as they receive the invoice. In practice, many customers treat it as within a few days.

Can I charge a late fee on an invoice?

In the UK, you can claim statutory interest and a fixed recovery sum from business customers. In India, registered micro and small enterprises are entitled to interest under the MSMED Act. In the US, it depends on your contract and state law, so agree it in writing first.

How do I set payment terms in the invoice maker?

Pick Net 7, Net 14, Net 30 or Net 60 and the due date fills in from the issue date. You can also type your own terms and set the due date yourself.

Invoice payment terms explained: Net 30, due on receipt and late fees

What the common payment terms mean, how to pick one, and what the law says about late payment in the US, the UK and India.

Published 6 October 2026

What payment terms are

Payment terms tell your customer when you expect to be paid. They turn "please pay soon" into a date, which gives you something clear to point to when you follow up.

Agree terms before you start the work, write them on every invoice, and include the actual due date as well as the term.

Common payment terms

These are the terms you will see most often.

Due on receipt: payment is expected as soon as the invoice arrives.
Net 7, Net 14, Net 30, Net 60: payment is due 7, 14, 30 or 60 days after the invoice date.
End of month (EOM): payment is due at the end of the month the invoice is dated in. "Net 30 EOM" means 30 days after the end of that month.
2/10 Net 30: the customer can take 2% off if they pay within 10 days; otherwise the full amount is due in 30 days.
Upfront or deposit: part or all of the amount is paid before the work starts.

How to choose your terms

Shorter terms get you paid sooner, but large companies often have fixed payment cycles and may only pay on Net 30 or longer. Ask your customer what their finance team uses before you agree.

For new customers or large projects, a deposit lowers your risk. For repeat customers who pay reliably, a longer term can be a fair trade for steady work.

Late payment in the United States

There is no single federal rule on late fees between businesses. What you can charge depends on your contract and on state law, and some states cap interest rates. The safest approach is to agree any late fee in writing before the work starts and repeat it on the invoice.

Late payment in the United Kingdom

Between businesses, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim statutory interest on a late invoice at 8% above the Bank of England base rate, even if your contract does not mention it.

You can also claim a fixed sum for the cost of recovering the debt: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. These rules apply to business customers, not to consumers.

Late payment in India

If you are a micro or small enterprise registered under the MSMED Act (through Udyam registration), the buyer must pay within the agreed period, and in any case within 45 days of accepting the goods or services.

If they pay late, the Act entitles you to compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India. You can also take a delayed payment to the MSME Samadhaan portal.

Following up on a late invoice

A polite, steady process gets most invoices paid without a dispute.

Send a friendly reminder a few days before the due date.
On the due date, resend the invoice and confirm the amount and how to pay.
A week after, ask directly when payment will be made.
After that, mention the late payment terms or statutory interest you are entitled to.
Keep every message in writing, in case you need it later.

A note on the rules

This guide is general information, not legal or tax advice. Rules change, so check the official guidance for your country or ask an accountant before you rely on it.

Questions

What does Net 30 mean on an invoice?: It means payment is due 30 days after the invoice date. An invoice dated 1 March on Net 30 terms is due on 31 March.
What does due on receipt mean?: It means the customer should pay as soon as they receive the invoice. In practice, many customers treat it as within a few days.
Can I charge a late fee on an invoice?: In the UK, you can claim statutory interest and a fixed recovery sum from business customers. In India, registered micro and small enterprises are entitled to interest under the MSMED Act. In the US, it depends on your contract and state law, so agree it in writing first.
How do I set payment terms in the invoice maker?: Pick Net 7, Net 14, Net 30 or Net 60 and the due date fills in from the issue date. You can also type your own terms and set the due date yourself.

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