How long should payment terms be on an invoice in the US?

Choosing the Right Invoice Payment Terms in the United States

Payment terms are the small line on an invoice that can make a big difference to your cash flow, customer relationships, and overall financial stability. If you run a business in the United States—whether you’re a freelancer, a contractor, a small agency, a product-based seller, or a growing service company—you’ve probably asked the question: how long should payment terms be on an invoice in the US?

The truth is there isn’t one universal answer. The best payment terms depend on your industry, your customer type, your leverage, the size of the invoice, and how predictable your expenses are. Some businesses can confidently invoice with “Due on receipt.” Others need to offer Net 30 or even longer terms to match established norms, win enterprise clients, or align with procurement policies. The goal is to select terms that get you paid promptly while still being reasonable and competitive.

In this guide, you’ll learn what common US payment terms look like, when you should use them, and how to set policies that protect your business without turning away good customers. You’ll also learn practical strategies to encourage faster payments, reduce late invoices, and handle disputes professionally. If you use Invoice24, you can apply these best practices with clear invoice layouts, automatic reminders, multiple payment options, and customizable terms—everything you need to make getting paid simpler.

What “Payment Terms” Actually Mean

Invoice payment terms describe when the customer should pay and what happens if they don’t. Terms usually include:

1) The due date or number of days until payment is due (for example, “Net 15” or “Net 30”).

2) Accepted payment methods (ACH, credit card, check, wire transfer, etc.).

3) Early payment incentives (optional) and late payment fees (optional).

4) Any deposit requirements or milestone schedules for larger projects.

5) Additional conditions like “payment due upon delivery,” “payment due before shipment,” or “payment due at completion.”

The most important part is clarity. When payment terms are vague, you may unintentionally invite delays. Clear terms remove ambiguity, set expectations, and make it easier to follow up when payment is late.

The Most Common Invoice Payment Terms in the US

US businesses commonly use “net” terms, which specify the number of calendar days the client has to pay after the invoice date. Here are the most common options:

Due on Receipt

“Due on receipt” means payment is expected immediately—usually the same day the invoice is received. It’s common for:

• Small projects and low-risk clients

• First-time customers

• Retail and consumer services

• Businesses that deliver digital goods or quick turnaround services

In practice, “due on receipt” often translates to “as soon as possible.” If you use this term, it helps to also include an actual due date (for example, “Due on receipt (Due date: February 10, 2026)”) to avoid any confusion.

Net 7

Net 7 gives the client one week to pay. This can be a good compromise when you want quick payment but still allow time for processing. It’s often used for:

• Freelancers and consultants

• Small B2B services

• Subscription-based professional services billed monthly

Net 10

Net 10 is less common than Net 15 or Net 30 but still appears in certain industries. It can work well when you want to encourage quick payment while giving a little flexibility for internal approvals.

Net 15

Net 15 is widely used by small and mid-sized service providers. It supports healthier cash flow than Net 30 while remaining familiar to many business clients. Net 15 can be ideal if:

• Your expenses are frequent (payroll, contractors, software, ads)

• Your work is delivered quickly and you don’t want payment lag

• Your customers are smaller companies that can pay faster

Net 30

Net 30 is arguably the most standard payment term in the US for B2B invoicing. Many companies, especially larger ones, are set up to process vendor invoices on 30-day cycles. If you’re selling to corporate clients, Net 30 may be expected. It often applies to:

• Ongoing services with monthly billing

• B2B product supply and wholesale

• Agencies working with established businesses

Net 30 can be workable, but it can also strain your cash flow if you’re small, growing, or carrying significant upfront costs. If you choose Net 30, you’ll want strong systems for reminders and follow-up.

Net 45 and Net 60

Longer terms like Net 45 or Net 60 are often requested by enterprise clients, large retailers, government entities, and organizations with formal procurement processes. These terms may be common in:

• Manufacturing and distribution

• Large-scale professional services

• Government contracting

• Vendor relationships with big-box or national chains

While longer terms can help you win certain accounts, they also increase your risk and require careful cash flow planning. If you accept Net 45 or Net 60, consider requiring deposits, milestone payments, or early-pay discounts to reduce the strain.

Net 90

Net 90 exists, but it’s generally considered very long and can be risky for small businesses. If a customer requests Net 90, treat it as a negotiation. You may want to counter with shorter terms, add a deposit requirement, or adjust pricing to reflect the financing you’re effectively providing.

So, How Long Should Payment Terms Be?

In most US small-business contexts, a strong default is Net 15 or Net 30. If you need a single practical answer, it’s this:

• Use Net 15 when you want healthier cash flow and your customers are able to pay promptly.

• Use Net 30 when you work with established businesses or when your industry expects it.

But “should” is not only about what’s common—it’s about what your business can afford. If you’re funding materials upfront, paying subcontractors quickly, or operating with thin reserves, you may need shorter terms. If you have strong reserves and want to win enterprise clients, you may accept longer terms with safeguards.

A Practical Framework to Choose the Right Terms

Instead of guessing, use this framework to choose payment terms that match your reality.

1) Consider Your Cash Conversion Cycle

Ask: how long does it take between spending money to deliver the product/service and getting paid? If you pay for materials today and don’t get paid for 45 days, you’re financing the project for a month and a half. That’s manageable for some businesses and impossible for others.

If your cash conversion cycle is tight, choose shorter terms (Net 7–Net 15), request partial payment upfront, or bill in milestones.

2) Match Industry Norms (But Don’t Let Them Trap You)

Industry norms matter because clients develop expectations. However, you can still differentiate. Many businesses use Net 30 simply because they copied it from someone else. If your clients value speed and results, you can often tighten terms without losing business—especially when your invoices are professional, easy to pay, and consistently enforced.

If you’re unsure, start with Net 30 for B2B clients and test Net 15 for smaller engagements. For high-demand services or specialized work, shorter terms are often acceptable.

3) Factor in Customer Type and Payment Reliability

Not all customers are equal in risk. A repeat client who pays quickly might qualify for Net 30. A brand-new client might get Net 7 or require a deposit. Large corporations may insist on Net 45 or Net 60—but they can still be reliable if you follow procurement rules precisely.

Segment customers into categories like:

• New customer (higher risk)

• Established customer (moderate risk)

• Long-term customer (lower risk)

• Enterprise/government (policy-driven)

Then align payment terms to each segment.

4) Consider Invoice Size and Project Complexity

The bigger the invoice, the more scrutiny it may receive. Larger invoices may require approvals, budget checks, or purchase order matching. For complex projects, consider milestone billing—such as 30% upfront, 40% mid-project, and 30% at completion—rather than one large invoice with long net terms.

5) Know Your Leverage

If your work is in high demand, your terms can be firmer. If you’re competing in a crowded market, you might need flexibility—but flexibility doesn’t have to mean long terms. You can offer multiple payment options, phased payments, or early-pay discounts instead of simply extending the due date.

Recommended Terms by Business Scenario

Here are practical recommendations you can adapt for common situations in the US.

Freelancers and Solo Service Providers

Many freelancers do well with:

• Due on receipt for small projects

• Net 7 to Net 15 for standard work

• Deposits (25%–50%) for new clients or larger projects

Freelancers often have limited cash reserves and should prioritize terms that keep cash moving. If a client insists on Net 30, consider negotiating a deposit and milestone payments.

Agencies and Professional Services Firms

Agencies typically use:

• Net 15 or Net 30 for monthly retainers

• Upfront payment for the first month of service

• Milestones for project-based work

Monthly retainers often work best when invoiced at the start of the billing period (not the end). That way, you’re not constantly carrying receivables while continuing to deliver work.

Contractors and Trades

Depending on the job type, common approaches include:

• Payment due upon completion for smaller jobs

• Net 7–Net 15 for residential or small commercial work

• Milestones for larger projects

Because materials and labor can be expensive upfront, deposits and progress billing are often more protective than long net terms.

Product-Based B2B Sellers and Wholesale

For wholesale and B2B product supply, terms often look like:

• Net 30 as a baseline

• Net 15 for new accounts

• Net 45 or Net 60 for large buyers (with safeguards)

For product shipments, consider terms that reduce risk, such as partial payment before shipment, payment due at delivery, or credit limits for new buyers.

Enterprise Clients and Government Contracts

Enterprise and government clients often have fixed payment cycles and compliance requirements. You may see:

• Net 30, Net 45, or Net 60 as standard

• Mandatory purchase orders

• Vendor onboarding steps

• Strict invoice formatting requirements

In these cases, the best strategy is not just accepting long terms, but building a process that ensures your invoice won’t get rejected or delayed due to paperwork issues.

How to Make Shorter Terms Work Without Losing Clients

Many business owners worry that asking for faster payment will scare clients away. But in practice, clients mostly want predictability, professionalism, and convenience. If you present your terms clearly and make payment easy, shorter terms often work fine.

Use Clear Due Dates (Not Only “Net” Language)

Some customers don’t interpret “Net 15” correctly or don’t prioritize it. Adding a clear due date helps. For example:

• “Payment terms: Net 15 (Due: March 5, 2026)”

When a due date is visible, clients can plan and process payment more quickly.

Offer Multiple Payment Methods

Customers pay faster when they can choose a method that fits their workflow. Make it easy to pay by offering options such as ACH bank transfer, credit card, and debit card. If checks are slow for you, encourage digital payment methods by highlighting them prominently on the invoice.

Invoice24 helps by letting you present payment options clearly, reducing friction and eliminating the “How do I pay this?” delay.

Automate Reminders

Polite reminders sent before and after the due date can dramatically reduce late payments. Automation helps you stay consistent without feeling awkward or spending time chasing invoices.

A common reminder sequence looks like:

• Reminder 3 days before due date

• Reminder on the due date

• Reminder 3–5 days after due date

• Final notice 10–14 days after due date

Consistency matters. If clients learn that you always follow up, they’ll take your due dates more seriously.

Make Your Invoice Easy to Understand

Confusing invoices create delays. Your invoice should clearly show:

• What was delivered (line items with descriptions)

• The invoice date and due date

• The total amount due

• Any applicable tax

• Payment instructions

A clean, professional invoice reduces the chance that someone in accounts payable will push it aside for clarification.

Should You Offer Early Payment Discounts?

Early payment discounts can work well in the US, especially in B2B contexts where the client has flexibility. A classic format is “2/10 Net 30,” which means the client gets a 2% discount if they pay within 10 days; otherwise, the full amount is due in 30 days.

Early pay discounts can speed up cash flow, but they come at a cost. Before offering them, ask:

• Is faster cash worth the discount?

• Would you otherwise need a loan or credit line?

• Do your customers respond to incentives?

If your margins are thin, a discount may hurt more than it helps. In that case, you can focus on convenience and reminders instead. Another approach is to offer early payment perks selectively for clients who routinely pay slowly, rather than making it standard for everyone.

Should You Charge Late Fees or Interest?

Late fees can encourage timely payment, but they must be handled carefully and professionally. Late fee rules vary by state, and they can also be affected by contract language. Many businesses choose to include a late fee policy in their agreement or on the invoice, such as:

• A flat fee after a grace period

• A percentage-based monthly interest charge

• Collection costs if the invoice is severely overdue

Even if you include late fees, the reality is many businesses don’t enforce them unless the relationship has already become strained. Still, having a late fee policy can make your terms feel more serious and reduce “casual” lateness.

A practical approach is to include a short grace period and focus first on reminders and friendly follow-up. If the invoice remains unpaid, you can escalate in steps.

Net 30 Isn’t Always 30 Days in Reality

One important reason to think carefully about payment terms is that “Net 30” often turns into 35, 45, or even 60 days in real-world conditions. Delays happen because:

• The invoice was sent to the wrong person

• The customer needs a purchase order reference

• The invoice didn’t match the customer’s vendor requirements

• Approvals took longer than expected

• The customer runs payments on a fixed schedule (for example, twice per month)

To avoid these issues, treat payment terms as only one part of getting paid. Your invoicing process matters just as much.

How to Reduce Delays: A Simple US Invoicing Checklist

To improve your odds of on-time payment, use this checklist every time you onboard a new customer or start a new project.

Confirm the Correct Billing Contact

Ask for the accounts payable email or billing contact, not just your day-to-day project contact. Sending invoices to the right person reduces delays dramatically.

Ask About Their Payment Process

Some companies require a vendor form, a W-9, or a purchase order. Knowing this in advance prevents invoice rejections.

Set Expectations Before Work Begins

Payment terms should be agreed to before the first invoice is sent. If possible, include them in your proposal, contract, or onboarding email.

Invoice Promptly

Delays in invoicing create delays in payment. Send invoices immediately after delivering the work or according to your billing schedule. The faster the invoice is issued, the sooner the payment clock starts.

Use Professional Invoice Formatting

Professional formatting signals legitimacy and makes it easier for clients to process your invoice quickly. A platform like Invoice24 helps ensure your invoices are consistent, branded, and easy to read.

Best Payment Terms for Small Businesses Starting Out

If you’re new to invoicing or still building a client base, payment terms can feel tricky. You want to appear professional, but you also need to protect yourself. A strong starter policy in the US looks like this:

• Default terms: Net 15

• New clients: deposit required for larger projects

• Small one-off work: due on receipt

• Clear due dates included on every invoice

• Friendly reminders automated

This approach keeps your cash flow healthier without being overly rigid. As your business grows and your client roster stabilizes, you can tailor terms by client type and project size.

When to Require Deposits or Upfront Payments

Payment terms aren’t only about due dates. Deposits and upfront payments are powerful tools to reduce risk and improve cash flow. Consider requesting a deposit when:

• The client is new

• The project requires upfront expenses (materials, software licenses, subcontractors)

• The project is large or long

• The scope is complex or likely to change

• Your schedule will be heavily committed to this client

Deposits also help establish commitment. Clients who pay a deposit are typically more responsive and easier to work with.

Milestone Billing: A Better Alternative to Long Net Terms

For large projects, milestone billing often works better than one invoice with Net 30 or Net 60 terms. Milestone billing divides payments based on progress, such as:

• 30% at project start

• 40% after a key deliverable

• 30% at completion

This reduces your risk and prevents you from carrying the entire cost of the project until the end. It also aligns payment with value delivery, which many clients find reasonable.

Milestones can be especially effective for design, development, construction, marketing campaigns, and consulting engagements.

How Payment Terms Affect Customer Relationships

Payment terms are part of your customer experience. If your terms are unclear, unpredictable, or inconsistent, customers may be confused or frustrated. On the other hand, if your terms are clear and your process is simple, most customers appreciate the professionalism.

To keep relationships positive:

• Communicate terms upfront

• Keep your invoices consistent

• Use polite reminders rather than emotional messages

• Assume delays are process-related until proven otherwise

• Be willing to discuss payment schedules for genuine hardship cases (especially for long-term customers)

You can be firm and friendly at the same time. Professional boundaries are not rude—they’re part of running a sustainable business.

Handling Late Payments the Right Way

Even with good terms, late payments happen. A structured approach helps you recover payment while staying professional.

Step 1: Friendly Reminder

Start with a short, polite message that includes the invoice number, amount, due date, and payment link or instructions. Many late invoices are simply overlooked.

Step 2: Confirm There Are No Issues

If payment still doesn’t arrive, ask whether the client needs any additional documentation or if there’s a dispute about the invoice.

Step 3: Escalate Clearly

If the invoice is significantly overdue, send a more direct message stating that payment is overdue, provide a deadline, and mention any applicable late fees or service pauses if those policies exist.

Step 4: Pause Work (If Appropriate)

For ongoing services, many businesses pause work when invoices are overdue beyond a certain threshold. This policy should be communicated upfront, ideally in your service agreement.

Step 5: Final Notice and Collections

If the invoice remains unpaid, you may need to consider a final demand notice or professional collections. This step depends on the amount, your relationship with the client, and your willingness to pursue payment.

The key is to keep your follow-up consistent and calm. Emotional messages can damage your leverage and relationship without improving results.

Payment Terms Wording You Can Use on US Invoices

Clear wording prevents misunderstandings. Here are examples you can adapt:

• “Payment terms: Net 15. Payment due by March 5, 2026.”

• “Payment due upon receipt. Please pay by March 1, 2026.”

• “Payment terms: Net 30. Payment due by April 10, 2026.”

• “50% deposit due before work begins. Remaining balance due within 7 days of delivery.”

• “Late payments may be subject to fees as outlined in our agreement.”

If you include additional conditions, keep them concise and consistent. Too much text can overwhelm clients and reduce the chance they read it.

How to Choose a Default Term for Your Business

If you want a simple policy you can implement immediately, pick a default term and then adjust for special cases. Here are three solid default policies depending on your business model:

Option A: Cash-Flow Friendly Default

• Default: Net 15

• New clients: deposit for projects over a set amount

• Enterprise exceptions: Net 30 with strict invoicing compliance

Option B: Standard B2B Default

• Default: Net 30

• New clients: Net 15 for the first 1–2 invoices

• Early pay incentive: optional small discount for payment within 10 days

Option C: Fast Payment Default

• Default: Due on receipt

• Larger projects: milestone billing

• Repeat clients: Net 7 or Net 15 as a goodwill option

Choose the option that best matches your cash position and customer expectations. If your business is growing quickly, you’ll usually benefit from shorter terms, because growth often increases expenses before revenue arrives.

Why Making Invoices Easy to Pay Matters as Much as the Due Date

Payment terms are only effective when payment is frictionless. Many late payments are not intentional—they’re the result of extra steps. If your client has to print your invoice, write a check, find an envelope, and mail it, you’ve added delays. If your client can pay digitally in minutes, you’ve removed delays.

An effective invoicing workflow typically includes:

• Professional invoices that clearly show totals and due dates

• Digital delivery (email or shareable link)

• Simple online payment options

• Automated reminders

• Real-time tracking of invoice status

Invoice24 is designed to support this workflow end-to-end, making it easier to set terms, send invoices quickly, and keep payments on schedule.

Final Thoughts: The Best US Invoice Terms Are the Ones You Can Enforce

So, how long should payment terms be on an invoice in the US? For many businesses, Net 15 or Net 30 is the sweet spot. Net 15 supports healthier cash flow, while Net 30 aligns with common B2B expectations. Longer terms like Net 45 or Net 60 may be necessary for enterprise clients, but they should come with safeguards like deposits, milestones, or incentives.

Most importantly, the best payment terms are the terms you can consistently apply. If you set Net 15 but never follow up, it won’t help. If you set Net 30 but invoice late and forget reminders, it won’t help either. Consistency, clarity, and convenience are what get invoices paid.

With a reliable invoicing process—clear due dates, well-written terms, easy payment options, and automated reminders—you can reduce late payments, strengthen customer relationships, and keep your business finances stable. Set terms that match your business reality, communicate them upfront, and use a system like Invoice24 to make invoicing and payments feel effortless for both you and your customers.