Net 30, Net 15, Due on Receipt: Payment Terms Explained

Payment terms are the small print on an invoice that decides when the money actually hits your account. Most people copy whatever they saw on the first invoice template they downloaded and never think about it again. That is a mistake. The term you choose — and the way you word it — has a measurable effect on how quickly you get paid. Here is what each common term means, how they compare, and which one to use when.

The glossary: what each term actually means

Payment terms are almost always expressed as the word Net followed by a number of days — the number of days the client has to pay, counting from the invoice date. A few special-case terms sit outside that pattern. Here are the ones you will actually see in the wild:

• Due on Receipt (DOR)— the client is expected to pay as soon as they receive the invoice. In practice, this means “within a few business days,” because accounts payable teams run on batch cycles.
• Net 7 — payment due within 7 days. Common for small recurring services (hosting, retainers).
• Net 14 — 14 days. A sweet spot for freelancers, as we will see below.
• Net 15 — 15 days. Functionally similar to Net 14, but easier for accounting teams that run on monthly half-cycles.
• Net 30 — the default for most B2B work. The client has 30 days.
• Net 45 and Net 60 — longer windows you see with large enterprises and public-sector clients. Often non-negotiable with them, but corrosive for cash flow.
• 2/10 Net 30 — a discount structure: the client can take a 2% discount if they pay within 10 days, otherwise the full amount is due in 30. Rare in freelance work, common in wholesale supply.
• End of Month (EOM) — payment due by the last day of the month the invoice was issued. Sometimes combined with Net, e.g. Net 15 EOM means 15 days after the end of the month.

Which one should you actually use?

The honest answer is: the shortest one your client will accept without pushing back. Every extra day on your terms is a day of money you have already earned sitting in someone else’s bank account.

A few rules of thumb based on client type:

• Small businesses and individuals — Net 7 to Net 14. They pay quickly when you give them permission to.
• Mid-sized companies — Net 14 is often accepted. Propose it; most will agree.
• Large corporations — Net 30 is usually the floor; some will try to impose Net 45 or Net 60 via their standard terms and conditions. Negotiate before signing the contract, not after.
• Government and public-sector — whatever their procurement rules say. You rarely get to change this.

If you are starting a new client relationship, default to Net 14. You can always loosen later; it is much harder to tighten.

Do shorter terms actually get paid faster?

Yes — and the effect is larger than most freelancers expect. A 2023 analysis of over 36 million invoices by Xero found that the average days-to-pay were roughly:

• Net 7: paid in ~9 days on average
• Net 14: paid in ~18 days on average
• Net 30: paid in ~34 days on average

Every tier got paid a few days late — that part is universal. But the absolute day count shifts almost one-for-one with the term you set. Going from Net 30 to Net 14 does not just shorten the window by 16 days on paper; it puts money in your account about 16 days earlier in practice.

The wording tricks that move the needle

Two small changes outperform almost any other invoice optimisation.

1. Use a calendar date, not a term.

“Payment terms: Net 14” asks the reader to do arithmetic. “Please pay by April 16, 2026” tells them exactly when. Humans react to dates, not to clauses. A FreshBooks study in 2022 found that invoices with a specific due date were paid roughly 2 weeks faster than those with a term alone.

2. Use direct, polite language.

“Terms: Net 30” reads as legalese. “Please pay by X — thank you!” reads as a human asking another human for something. The second form performs consistently better in small experiments. It feels soft; it is not.

When to require a deposit or milestone payment

For any engagement over roughly €2,000 or two weeks of work, consider structuring the payment into two or three chunks:

• 50% deposit on contract signing, before work begins.
• 25–50% at a named milestone (design approval, first delivery).
• Balance on final delivery, Net 14.

This is not aggressive — it is standard commercial practice. A client who refuses to pay a deposit is telling you something important about their cash flow or their intentions, and it is better to hear that before you start work than after.

The takeaway

Payment terms are not a legal formality. They are a lever — maybe the biggest single lever a freelancer has over their cash flow. Default to Net 14 with new clients, use calendar dates instead of term codes, and require deposits on anything substantial. These three habits alone will do more for your finances than any amount of chasing.