Payment terms: the line on the invoice that decides when you get paid

What are payment terms?

Payment terms are the line on an invoice that says when it has to be paid. Everything else on the page says what you did and what it cost. This is the only line that decides when the money arrives.

They usually come as a short phrase: "Due on receipt", "Net 14 days", "30 days end of month". Each one is a rule for working out a date, counted from the day the invoice is dated.

So the terms are a choice, and most people never make it. They take whatever the template said, or what the last firm they worked for used, and then wonder why they are waiting five weeks to be paid for a boiler they fitted in an afternoon.

Everything else on the invoice says what you did. The terms decide when you are paid for it.

What do Net 7, Net 14 and Net 30 mean?

"Net" means the whole amount on the invoice, and the number is how many days your customer has to pay it, counted from the invoice date. Net 14 days on an invoice dated the 6th means paid by the 20th.

Here are the ones you will meet, and what each one asks of the person paying:

Two of those need a word. Net 15 turns up in searches because American software uses it; in Britain you will see 7, 14 and 30 far more often. And end of month terms, common with larger contractors, run from the last day of the month the invoice is dated in. An invoice dated 2 October on 30 days end of month is due 30 November, not 1 November.

That last one is worth checking before you agree to it. Invoice on the 1st and you wait most of two months.

What happens if you never agreed any terms?

For a business customer, the law fills the gap: payment is late 30 days after they get the invoice, or after the work is done if that is later. Agreed terms between businesses usually cannot run past 60 days.

That is from GOV.UK’s guide to late commercial payments, and it is worth reading in full because it is short. A longer period than 60 days can be agreed, but it has to be fair to both businesses. For a public authority the usual limit is 30 days.

Those apply when one business owes another. If you decide to add interest, GOV.UK says to send a new invoice for it, and the fixed sum can be charged only once for each payment.

How long big firms actually take, from their own reports, is in our late payment statistics: the typical one averaged 31 days in the first half of 2026.

And a homeowner?

Those rules are about one business paying another. With a homeowner, the terms are what the two of you agreed, which is the best argument there is for agreeing them before you start rather than after you finish.

Which payment terms should a tradesperson use?

The shortest your customers will accept, agreed before the job rather than announced after it. A homeowner who watched you work can pay within a week; a contractor with a payment run may need thirty days and will tell you so.

The case for short terms is simple. By the time you invoice, the work is done and the materials are paid for, often on your own card. Every day of credit after that is you lending the customer money, interest free.

So think about it customer by customer:

A homeowner, a small job. Due on receipt or 7 days. They are standing in the kitchen you just finished; there is nothing to wait for.

A landlord or a letting agent. Often 14 days, because the invoice goes through somebody's inbox before anybody pays it.

A business with an accounts department. Ask what their terms are before you quote. Thirty days is common, and the 30 day default above applies if nothing is agreed anyway.

A long job. Terms on one final invoice are the wrong tool. Stage payments, an agreed amount at each point in the work, keep you from financing a whole extension; the page for builders shows how those are billed.

Put them on the quote

Terms agreed before the work are terms; terms first seen on the invoice are a surprise. If your quote says "Net 7 days", the invoice that follows is only repeating what the customer already said yes to.

How should payment terms appear on an invoice?

Print the terms and the date they work out to, side by side. "Net 14 days" is a sum your customer has to do; "Due Tuesday 20 October" is a day they can put in a diary.

Here is one invoice, dated Tuesday 6 October, under each of the terms the app offers:

Near the terms, put how to pay: your bank details or whatever else you take. A customer who has to ask for your sort code has been handed a reason to pay next week instead.

The rest of what belongs on the page, the number, the dates, the description, is in the sole trader invoice guide, and a filled-in one is in the simple invoice example.

How do payment terms work in Invoice Koi?

You pick a default once, in your business details, and every new invoice starts from it. The due date is worked out for you and printed on the invoice beside the terms.

Your default is one of Due on receipt, Net 7 days, Net 14 days or Net 30 days. A client who always pays on different terms can have a default of their own, set on their record, which overrides yours whenever you bill them; there, and on any one invoice, next day is a choice too.

On any one invoice you can change the terms, or choose "On a date" and pick the due date off a calendar. That is how you do Net 60, end of month, or the date a contractor's payment run actually falls on.

The terms print on the quote as well. The due date does not, because it would be counted from the day you wrote the quote rather than the day they said yes. When you turn the quote into an invoice, the terms come with it and the due date is counted from that day.

What it does not do

No interest or recovery line. Nothing adds statutory interest or the fixed sum to an invoice, and none of the chasing emails mentions either. If you decide to claim them, GOV.UK says that is a new invoice, and you write the line yourself.

No Net 60 or end-of-month button. Those are a date off the calendar, as above, so they print the due date with no named terms beside it.

Wondering what to say when the date passes? The invoice email templates have one for the due date and a follow-up for after it. If those go unanswered, a letter before action is the formal step before a court claim.

Asked about payment terms