What "Net" means on an invoice
When you write "Net 30" on an invoice, you're telling the client they have 30 calendar days from the invoice date to pay. Net 15 means 15 days. Net 7 means 7 days. "Due on receipt" means payment is expected immediately.
The term comes from accounting — "net" refers to the total amount owed after any discounts. In practice, most people just use it to mean the number of days until payment is due.
Net 30: when it makes sense
Net 30 is the most commonly cited payment term, especially in corporate environments where invoices have to go through an accounts payable department before a check gets cut. If you're doing work for a mid-size or large company, they may actually require Net 30 to match their internal processes.
Net 30 also makes sense for ongoing relationships where you're invoicing regularly — a monthly retainer, for example. The longer window gives clients predictability and reduces back-and-forth.
The downside is obvious: you're waiting up to a month to get paid for work you've already done. For contractors who have overhead, materials costs, or tight cash flow, that can be a real problem.
Net 15: the better default for most contractors
For most independent contractors and freelancers doing project work for individuals or small businesses, Net 15 is a more practical default. Two weeks is enough time for any reasonable client to arrange payment, and it cuts your waiting time in half compared to Net 30.
If you're doing one-off jobs — a bathroom remodel, a landscaping project, a freelance design job — Net 15 is entirely reasonable to ask for. Most clients won't push back.
Net 7 and due on receipt
Net 7 is appropriate for small jobs, new clients you don't yet have a relationship with, or any situation where you want payment resolved quickly. Handymen, cleaners, and other service providers doing jobs under a few hundred dollars often use Net 7 or due on receipt as their standard.
"Due on receipt" is common when payment is collected at the time of service — think of it as the invoice version of paying at the register. It's perfectly legitimate to use on an invoice; it just sets the expectation that you're not extending credit.
How payment terms affect whether you get paid
The research on this is consistent: shorter payment terms result in faster payment. This seems obvious, but many contractors default to Net 30 because they've seen it on invoices before, not because it's right for their situation.
A few practical notes:
- Whatever terms you set, put them clearly on the invoice — not buried in fine print.
- If a client pushes back on your terms, that's useful information about how they pay. You can negotiate, but be aware of what you're agreeing to.
- Adding a small late fee (1–2% per month) gives clients a concrete reason to pay on time and gives you leverage if they don't.
- Consistency matters — use the same terms across all your invoices so clients know what to expect.
The simple answer
If you're a solo contractor doing project-based work for individuals and small businesses: start with Net 15. If a client is a larger company with a formal AP process, ask them what terms they need — they'll tell you, and you can decide if it works for you. If you're collecting at the time of service, use due on receipt.
Don't overthink it. The best payment terms are the ones you actually put on your invoices and follow up on consistently.