Due on receipt means pay now. Net 7, Net 15 and Net 30 mean pay within that many days of the invoice date. A specific due date— “due 21 August” — means the same thing in a form nobody has to interpret, which for most small service businesses makes it the better choice.
The terms you will actually meet
| Term | Means | Fits |
|---|---|---|
| Due on receipt | Payment expected as soon as the invoice arrives | Same-day work, new customers, anything where you were on site today |
| Net 7 | Within 7 days of the invoice date | Regular domestic customers on a weekly or monthly round |
| Net 14 / Net 15 | Within 14 or 15 days | Small business customers — long enough to be reasonable, short enough to stay in the current month |
| Net 30 | Within 30 days | Larger organisations with a payment run. Often not negotiable. |
| 50% deposit, balance on completion | Half before the work, the rest when it is done | Booked work, materials-heavy jobs, anything with a date held for one customer |
Two details that cause arguments. Net terms count from the invoice dateunless the invoice says otherwise, not from when the customer opened it or when the work finished. And “Net 30” assumes the reader knows the convention — plenty of domestic customers do not, and read it as a product code.
Choosing terms
The right terms depend less on your preference than on who is paying and how exposed you are if they do not.
- Domestic customers:a real date, short. Someone whose kitchen you just worked in is not running a payment cycle. Give them “due 21 August” and a way to pay, and most will pay that evening.
- Business customers: ask what their standard terms are before you quote. A company that pays on Net 30 will pay you on Net 30 whatever your invoice says, and knowing that up front is a cash-flow fact rather than a disappointment.
- Large or long jobs:split the risk. A deposit, or staged payments tied to points in the work, keeps you from financing somebody else’s project out of your own account.
- New customers: shorter than you would offer an established one. You can always relax terms later; tightening them reads as distrust.
Whatever you choose, put it on the document with the payment instructions rather than in a covering message. The invoice is the thing that gets filed; the message gets scrolled past.
Late fees and interest: the careful version
A lot of invoicing advice states a late-fee rate as though it were a universal entitlement. It is not. Whether you can charge anything for late payment, how much, and whether it would be enforceable depends on your agreement with the customer and on the law where you both are — including whether the customer is a business or a consumer.
Two real examples of how differently this is handled, to make the point concrete:
United Kingdom — statutory interest between businesses
UK law gives a business a statutory right to charge interest on a late commercial debt. GOV.UK states the rate as 8% plus the Bank of England base rate for business-to-business transactions, and a business can also claim a fixed sum towards recovery costs, scaled by the size of the debt. That right does not extend to debts owed by consumers. Agreed payment dates are also constrained: usually within 30 days for public authorities and 60 days for business transactions.
United States — no single answer
There is no general federal rule entitling a private business to charge late fees; it comes from your contract, and states regulate interest differently. The nearest federal analogue runs the other way — the Prompt Payment rules oblige federal agencies to pay a proper invoice, generally within 30 days, and to pay interest automatically if they are late. That is the government as a customer, and it says nothing about what you may charge a private client.
Getting paid on time without a policy
Most late payment is not resistance, it is friction. The three cheapest fixes have nothing to do with terms:
- Invoice immediately. An invoice sent the same day is paid faster than an identical one sent next Tuesday, because it arrives while the customer is still pleased with the work.
- Make paying trivial. Full bank details, or your payment app handle, on the document itself. Anyone who has to reply asking how to pay you has already delayed you by a day.
- Give a date, not a term.“Due 21 August” is a thing a person can act on. “Net 14” is arithmetic they have to do first.
When someone has not paid
Assume it was forgotten, because it usually was. A short, friendly message a few days after the due date that restates the amount, the invoice number and how to pay resolves the large majority of late payments without any mention of terms at all.
Escalate slowly, keep every message, and keep the original document — the one you can reopen and re-send unchanged. That record is worth more than any clause about interest.
Sources
Late-payment interest, statutory compensation and enforceability are governed by contract and by the law where you and your customer are. The sources below are the primary references for the two jurisdictions named on this page. They are not advice, and they do not tell you what applies to your situation.
- GOV.UK — Late commercial payments — charging interest on commercial debtThat UK statutory interest on late commercial debt is “8% plus the Bank of England base rate for business to business transactions”, and that it does not apply to consumer customers.
- GOV.UK — Late commercial payments — claim debt recovery costsThe fixed sums a UK business may claim for the cost of recovering a late commercial debt.
- eCFR — 5 CFR Part 1315 — Prompt PaymentThe US federal Prompt Payment rules — payment periods and automatic late-payment interest — which bind federal agencies as customers, not private businesses.
- Acquisition.gov — FAR 52.232-25 Prompt PaymentThe standard 30-day payment due date used in US federal contracts.
