Payment terms explained, from due on receipt to 2/10 net 30

What payment terms on an invoice mean

Payment terms are the conditions on an invoice that set when payment is due, how it should be made, and any discount for paying early or charge for paying late. They turn “please pay” into a specific deadline both sides can point to, which is why every invoice should carry them.

Most terms use a short code. “Net” means the full amount, with no discount, and the number after it is the count of days the customer has. Codes like EOM and 2/10 add conditions on top. The codes are trade shorthand rather than law, so it pays to write the actual due date next to whichever code you use.

Terms are agreed between you and the customer, ideally before the work starts, in your quote or contract. The invoice then repeats them. A customer who sees new terms for the first time on the invoice has not really agreed to them.

Common terms and the due date each one gives

The table lists the terms you will see most often, what each means, and the due date it produces for one example invoice dated 14 October 2026. Seeing them on a single date makes the differences clear: the window ranges from the same day for due on receipt to 13 December for net 60.

How to count the days

Count calendar days, starting the day after the invoice date. So for net 30 on an invoice dated 14 October, 15 October is day one and 13 November is day 30. Weekends and public holidays count unless your agreement says otherwise. If the due date lands on a weekend, a customer may pay on the next working day.

Disputes usually start when the two sides count from different events. Some customers count from the day they receive the invoice, or from delivery, not from the invoice date. The UK default rule, for example, runs from when the customer gets the invoice or the goods or service. Avoid the argument by writing the date in full: “Due 13 November 2026 (net 30)”. Our guide to setting an invoice due date goes further into this.

Worked example: what 2/10 net 30 saves and costs

Take a $4,850.00 invoice dated 14 October 2026 on 2/10 net 30. If the customer pays by 24 October, they deduct 2%, which is $97.00, and pay $4,753.00. If they miss that date, the full $4,850.00 is due by 13 November. The supplier trades $97.00 for receiving cash 20 days sooner.

That discount is generous when you scale it up. Giving up $2 for every $98 received 20 days early works out at roughly 37% a year (2 ÷ 98 × 365 ÷ 20 = 0.372). Before you offer it, be sure faster cash is worth that much to you. A smaller offer such as 1/10 net 30 costs half as much.

If you are VAT registered in the UK, HMRC’s list of details for a full VAT invoice includes the rate of any cash discount offered, so state the discount on the invoice itself. Example figures only.

End of month terms and why they confuse people

EOM means end of month, but people use it in two ways. Plain “EOM” usually means payment is due on the last day of the month the invoice is dated. “Net 30 EOM” usually means 30 days after that month ends. Because readings differ, always pair an EOM code with the actual due date.

Month end terms suit customers who pay suppliers in one batch each month. They also mean an invoice dated on the 1st gets much longer to pay than one dated on the 30th. On our example invoice dated 14 October, EOM gives 17 days and net 30 EOM gives 47 days. If timing matters to your cash flow, invoice early in the month.

What happens when no terms are agreed

In some countries the law fills the gap. In the UK, GOV.UK says that unless you agree a payment date, the customer must pay within 30 days of getting your invoice or the goods or service. In Ireland, the government says that where there is no contract, payment is due 30 days after the purchaser receives the invoice.

Both countries also cap long terms between businesses. GOV.UK says agreed periods should be within 30 days for public authorities or 60 days for business transactions, with longer business periods allowed only if fair to both sides. Ireland’s rules say a period over 60 days must be expressly agreed and not grossly unfair to the supplier, and public authority contracts cannot exceed 30 days.

Outside rules like these, the agreement between you and the customer is what counts, which is another reason to put your terms in writing before you start. What you can charge when those dates pass is covered in late payment fees and interest.

How to choose terms for your business

Choose the shortest window your customers will accept without friction. Shorter terms bring cash in sooner, while longer ones may be expected by large buyers. Think about how long you can wait for money, how well you know the customer, and the size of the job. You can use different terms for different customers.

• New or one off customers: due on receipt, net 7, or a deposit upfront.
• Regular small business clients: net 14 is a common middle ground.
• Large companies: they may insist on net 30 or longer. Price the wait into your quote.
• Big projects: split into a deposit and milestone invoices so you are never owed the full amount at once. See deposit invoices.

For more ways to shorten the wait, read how to get paid faster.

How to write the terms on your invoice

Put the terms near the total, in one or two plain sentences: the period, the actual due date, how to pay, and any discount or late charge you agreed. Plain words beat codes, so write “within 14 days” as well as “net 14”. Keep the wording the same on every invoice so customers learn it.

Three examples you can adapt:

• Payment due within 14 days, by 28 October 2026. Bank transfer to the account below, quoting the invoice number.
• Terms 2/10 net 30: deduct 2% if paid by 24 October 2026, otherwise the full amount is due by 13 November 2026.
• Due on receipt. Card or bank transfer accepted.

The invoice generator has a terms field that prints under the total, and the consulting invoice template shows the layout on a services invoice. Freelancers can find more on terms in invoicing as a freelancer.