Invoice Payment Terms Explained — Net 30, Net 60, COD and More
Payment terms define when and how you expect to be paid. Choosing the right terms protects your cash flow and sets professional expectations with clients.
Net 30 — Most Common Business Term
Meaning: Payment is due within 30 days of the invoice date.
Best for: B2B transactions, established client relationships, corporate clients with accounts payable departments.
Pros: Standard and widely accepted. Cons: 30 days is a long time to wait for small businesses.
Net 14 / Net 7 — Faster Payment
Meaning: Payment due within 14 or 7 days respectively.
Best for: Freelancers, small service businesses, short-term projects. Do not be afraid to use Net 14 — it is entirely reasonable for service work.
Due on Receipt
Meaning: Payment is due immediately when the invoice is received.
Best for: One-time clients, new clients, high-risk situations. Often used for cash businesses.
COD — Cash on Delivery
Meaning: Payment collected at the time of goods delivery.
Best for: Product deliveries, e-commerce, situations where payment before delivery is impractical.
50/50 — Milestone Payment
Meaning: 50% paid upfront before work begins, 50% on completion.
Best for: Project-based work, large freelance projects, web development, design projects. This protects both parties and is highly recommended for projects over PKR 50,000.
EOM — End of Month
Meaning: Payment due at the end of the calendar month in which the invoice was issued.
Best for: Retainer clients, monthly service billing, accounting simplicity when batching payments.
2/10 Net 30 — Early Payment Discount
Meaning: 2% discount if paid within 10 days, otherwise full amount due in 30 days.
Best for: Encouraging faster payment from large corporate clients. The small discount is worth getting cash 3 weeks earlier.
Which Terms Should You Use?
For Pakistani freelancers: Net 14 or 50/50 are best. For corporate clients: Net 30 is standard. For product sales: COD or advance payment. Always state your payment terms clearly on every invoice — add it to the Terms section of our Invoice Generator.
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