Small business owner reviewing invoice paperwork and payments at a desk — Image by Direct Media, cc0, via Openverse.

You finished the work, sent the deliverable, and now you wait. Days turn into weeks. You send a polite follow-up. Still nothing. The client says they "forgot" or the invoice "went to spam." Sound familiar? More often than not, the root of slow payment isn't a bad client—it's vague or non-existent invoice payment terms.

Payment terms are the single most important line on your invoice that most freelancers, contractors, and small business owners set up wrong, forget entirely, or copy-paste from a template without a second thought. This guide breaks down what payment terms actually mean, which ones to use, how to handle deposits and partial payments, and how to structure your invoices so clients pay on time—without awkward follow-ups.

Whether you send a freelancer invoice from your phone between jobs or manage billing for a growing service business with multiple contractors, clear payment terms protect your cash flow and set professional expectations from the very start. Let's dive in.

What Are Invoice Payment Terms?

Invoice payment terms are the conditions under which you expect to receive payment for your goods or services. They are a critical component of your invoice template, transforming it from a simple request for money into a clear business document. They tell your client three fundamental things:

When the payment is due. A specific number of days after the invoice date (like Net 15), on a particular calendar date, or upon receipt.
How the payment can be made. Bank transfer, credit card, online payment link, check, or another method.
What happens if payment is late. Late fees, interest, paused work, or other consequences (used carefully and within legal limits).

Think of payment terms as the rules of the agreement between you and your client. Without them, you're relying on goodwill and memory—two things that don't keep your business funded or your projects moving forward.

A well-written payment terms section on your PDF invoice or online invoice removes ambiguity. It gives clients a clear instruction and removes the excuse of "I didn't know when it was due." When you pair these terms with a convenient payment link, you remove the final barrier to getting paid.

Why Payment Terms Matter More Than Your Hourly Rate

Many freelancers focus intensely on pricing—$50/hour, $150/hour, $5,000 per project—but spend almost no time on when and how that money actually arrives. Here's the reality that impacts every small business invoice:

A significant percentage of invoices issued by small businesses are paid late, creating cash flow crunches.
The average freelancer spends hours each month chasing unpaid invoices, time that could be spent on billable work.
Cash flow gaps caused by late payments are a top reason freelancers turn down new work they can't afford to start before getting paid for existing work.

Strong payment terms don't guarantee every client pays on time, but they dramatically improve the odds. They also give you a professional framework for following up—you're not "being pushy," you're referencing your own documented terms. It's the difference between a personal plea and a business reminder.

Common Invoice Payment Terms Every Freelancer Should Know

Here are the most widely used payment terms, what they mean, and when each one makes sense for your freelancer invoice or service business billing.

Net Terms (Net 15, Net 30, Net 60)

"Net 30" means the full balance is due 30 days after the invoice date. This is the most common payment term in B2B invoicing. Variations include:

Net 15 — Due within 15 days. This is a highly recommended default for freelancers, small projects, and service businesses that need faster cash flow. It's professional, reasonable, and puts less strain on your finances than Net 30.
Net 30 — Due within 30 days. Standard for many business-to-business transactions and established client relationships with longer approval cycles.
Net 60 / Net 90 — Due within 60 or 90 days. More common with large corporations or government contracts. Generally, avoid these as a freelancer or small business unless you have the cash reserves to comfortably absorb the wait.

Pro Tip: If you're a freelancer or small service business, Net 15 is often your best starting point. It's a fair window that clients rarely push back on and it keeps your revenue cycle tight.

Due on Receipt

"Due on receipt" means the client should pay immediately upon receiving the invoice. This works well for:

One-time projects with new clients where trust is still being established.
Smaller jobs where upfront payment is the norm.
Situations where you're attaching an invoice with payment link so the client can pay in one click.

The limitation of "due on receipt" is that it gives clients no structured window, so some will treat it as "I'll pay whenever I get to it." Pairing this term with a payment link (more on that later) removes friction and makes immediate payment the path of least resistance.

50% Upfront, 50% on Completion

This is one of the most popular structures for project-based work. You collect half before starting and half when you deliver. It protects both you and the client—you're not working for free, and the client has assurance you'll finish the job. This structure naturally creates partial payments on your invoice.

If your invoicing tool supports partial payment tracking, it can show the deposit as paid, the balance as pending, and update the status as each payment comes in. This provides transparency for both parties throughout the project lifecycle.

Milestone-Based Terms

For larger projects, milestone-based payment terms break the project into phases, each with its own payment. A website redesign, for example, might be structured as:

25% upon contract signing.
25% after design approval.
25% after development is complete.
25% upon final delivery and handoff.

Milestone invoicing works especially well for agencies and contractors managing complex projects. Each milestone gets its own invoice, and each can carry its own due date. This method is excellent for managing cash flow over multi-week or multi-month engagements.

Late Payment Terms

You can (and should) include language about late payments. A common approach is to state a late fee that accrues after a grace period. The goal is to motivate timely payment, not to generate income from penalties.

Some jurisdictions restrict late fees or interest charges, so this is one area where you want to keep it reasonable and be aware of local regulations. You're setting a professional expectation, not issuing legal threats. Always ensure your terms are fair and enforceable in your area.

Currency and Payment Method Terms

If you work with international clients, specify:

The currency your invoice is in (e.g., USD, EUR, GBP).
Whether the client is responsible for conversion fees or bank charges.
Which payment methods you accept.

When you share an online invoice with a payment link—especially one powered by Stripe Connect—the client sees their available payment options at checkout. Depending on their location and eligibility, this might include credit cards, Apple Pay, Google Pay, Klarna, Afterpay, or other methods. Your payment terms should state the invoice currency clearly so there's no confusion about the final amount due.

How to Write Payment Terms That Actually Get Paid

Knowing the terms is one thing. Writing them clearly on your invoice is another. Here's a practical framework:

Step 1: Choose one primary term. Don't mix Net 15 and Net 30 on the same invoice. Pick one. For most freelancers and service businesses, Net 15 or Due on Receipt is ideal for the initial setting.

Step 2: State it plainly. Put the payment terms in a visible spot on your invoice—the top right, near the due date, or in a dedicated "Terms" section. Don't bury it in small print at the bottom. Clarity is key.

Step 3: Include the due date in two formats. Write both the term and the actual calendar date. For example: "Net 15 — Due: [Insert Date]." This removes any ambiguity about when the clock starts ticking.

Step 4: Add a late payment note. One sentence is enough. "Payments not received within 15 days of the due date may incur a late fee of 1.5% per month." Keep it simple and professional.

Step 5: Make paying easy. The best payment terms in the world don't help if the client has to manually log into their bank, type in your account number, and reference an invoice number. A payment link on your invoice turns a five-minute bank transfer into a 30-second click. Tools like FacturApp generate Stripe Connect payment links directly from your invoice, so the client sees a clear "Pay Now" option with the exact amount pre-filled. This is the single most effective way to accelerate payments.

Deposits and Partial Payments: Protect Your Cash Flow

Deposits and partial payments are some of the most powerful tools in a freelancer's or contractor's billing strategy, yet many independent professionals avoid them because they feel "awkward" or assume clients will say no.

Here's the truth: asking for a deposit is standard practice in nearly every service industry. Contractors require deposits before buying materials. Agencies require retainers before beginning campaigns. Consultants often bill a project fee in thirds. Clients expect this—and they respect it more than getting an unexpectedly large bill at the end when budgets may be tighter.

When to Ask for a Deposit

Any project over a certain threshold (e.g., $500). A 25–50% deposit is reasonable and customary for significant work.
New client relationships. A deposit establishes mutual trust and commitment.
Projects with significant upfront time or material costs. If you need to buy supplies, book venues, or block significant time, a deposit is justified.
Long engagements. For monthly retainers or multi-month projects, the first payment upfront and recurring billing thereafter is standard.

How to Communicate Partial Payment Terms

Include deposit terms in your proposal, your contract, and on the invoice itself. The invoice should clearly show:

The total project amount.
The deposit amount and that it has been paid.
The remaining balance and when it is due.

A good invoice app handles this automatically. For example, FacturApp's invoicing system supports partial payments natively—when a client pays a deposit via the payment link, the invoice status updates to "Partial," the paid amount is recorded, and the pending balance is clearly displayed for both you and your client. This eliminates the back-and-forth of "did you get my deposit?" messages and provides a clear audit trail.

Stripe Connect Payment Links: The Fastest Path from Invoice to Payment

One of the biggest improvements you can make to your invoicing workflow is adding a payment link to every invoice you send. Here's why this matters for your mobile invoicing and payment collection:

When a client receives your freelancer invoice via email, WhatsApp, or text, and the only option is "please transfer to this bank account," you're creating work for them. They have to open their banking app, manually enter your details, type in the amount, and hope they reference the correct invoice number. Every extra step is an opportunity for delay or error.

A payment link eliminates that friction entirely. The client clicks one link, sees the exact amount due, selects their preferred payment method, and pays in seconds. The money goes directly to your connected Stripe account—FacturApp doesn't hold or custody any funds. This is secure, fast, and convenient for both parties.

This approach is especially powerful for service businesses that send invoices from the field. A painter who finishes a job and sends an invoice with payment link via text message before leaving the driveway is far more likely to get paid that day than one who mails a paper invoice and hopes the client remembers to write a check.

When your invoice app generates payment links tied to each invoice, payments can update the invoice status automatically. No manual bookkeeping. No "mark as paid" guesswork. This automation saves you time and reduces administrative errors.

Managing Payment Terms Across Multiple Clients and Projects

If you're freelancing for three different clients, each with different agreements, keeping track of payment terms manually is a recipe for missed payments and inconsistent follow-up.

Consider how these scenarios play out:

Client A agreed to 50% upfront, 50% on completion for a branding project.
Client B pays a monthly retainer on the 1st of each month.
Client C has Net 15 terms on a series of small design tasks.

Without a system, you're juggling spreadsheets, calendar reminders, and mental notes. With a proper invoice app, each client record stores their agreed terms. You can generate new invoices with the correct terms pre-filled, and you get clear visibility into what's paid, what's partial, and what's overdue. This organization is crucial for maintaining healthy cash flow.

Organizing client records with payment terms attached means you never have to dig through email threads to remember what you agreed to. When you create a new invoice for a returning client, their terms are already there, ensuring consistency and professionalism.

For service businesses managing multiple brands or companies from a single account, this becomes even more important. A contractor who operates both a painting business and a handyman service needs separate issuing companies with potentially different payment structures—all managed from one login for efficiency.

Payment Terms for Specific Service Businesses

Different industries have different norms. Here's a quick reference to help you set appropriate terms for your small business invoice:

Home Services (Painters, Builders, Remodelers)

Standard: 30–50% deposit before work begins, balance due upon completion.
Materials: Large material purchases may warrant a separate deposit or material cost invoice.
Multi-phase jobs: Milestone billing tied to project phases (demolition, rough-in, finish, final inspection) is very common and protects both parties.

Creative and Digital Services (Designers, Developers, Marketers)

Standard: 50% upfront for projects, Net 15 for ongoing work.
Retainers: Billed monthly in advance, due on the 1st or within 7 days of the invoice date.
Scope changes: Separate invoice or line item with its own terms for any work beyond the original agreement.

Personal Services (Beauty, Tattoo, Wellness)

Standard: Due on receipt or at time of service for most transactions.
Deposits for appointments: Particularly for high-value sessions, events, or to secure a time slot.
Package deals: Full payment upfront or split into sessions with clear payment dates.

Consulting and Professional Services

Standard: Net 15 or Net 30, depending on the client and project size.
Large engagements: Monthly billing with Net 15 terms ensures regular cash flow.
Retainers: Due at the start of each billing period to secure the consultant's time.

Whatever your industry, the principle is the same: set terms that protect your cash flow and communicate them clearly on every PDF invoice you send. Consistency builds your professional reputation.

Sample Payment Terms You Can Copy and Customize

Here are ready-to-use payment terms for common scenarios. Customize the details to match your specific agreements and local norms:

Scenario 1: Simple Freelance Project (Net 15)

"Payment is due within 15 days of the invoice date (Net 15). A late fee of 1.5% per month applies to overdue balances. Please use the secure payment link on this invoice for fast and convenient payment."

Scenario 2: 50/50 Deposit Structure

"50% deposit ($X) is due upon acceptance of this proposal to secure the project start date. The remaining 50% ($X) is due upon final delivery. Both payments are due within 15 days of their respective invoice dates."

Scenario 3: Monthly Retainer

"Monthly retainer of $X is due on the 1st of each month for the upcoming month's services. Payment is due within 7 days of the invoice date. Services may be paused if payment is not received within 14 days."

Scenario 4: Milestone Billing

"This project is billed in four milestones. Each milestone invoice is due within 10 days of the invoice date. See the attached project schedule for milestone definitions and corresponding amounts."

Scenario 5: Due on Receipt with Online Payment

"Total amount due: $X. Please pay using the secure payment link provided below. Payment is due upon receipt. Accepted methods include credit card, debit card, Apple Pay, Google Pay, and other options available at checkout."

Checklist: Improving Your Invoice Payment Terms Today

Use this checklist to audit your current invoicing setup and implement best practices:

Every invoice has a clear payment due date (not just a term, but the actual calendar date).
Payment terms are stated in plain, non-legal language that clients can understand instantly.
Payment terms appear near the top or in a prominent section—not buried in footnotes.
A payment link is included on every invoice so clients can pay with one click.
Deposits are collected before starting any project over a defined threshold (e.g., $500).
Partial payments are tracked, and invoice status updates automatically when payments come in.
Late payment language is included but remains reasonable and professional.
Currency and payment method expectations are clearly stated for international clients.
Client records include agreed-upon payment terms so repeat invoices are consistent and fast to generate.
Invoices are shared through the client's preferred channel—email, WhatsApp, SMS, or direct link—making it easy for them to pay.

FAQ: Invoice Payment Terms for Freelancers and Small Businesses

What payment terms should I use as a freelancer?

For most freelancers, Net 15 (due within 15 days) is the ideal starting point. It's professional, gives clients a reasonable window, and keeps your cash flow tighter than Net 30. For projects where you want payment before starting work, use a 50% deposit with the balance due on completion. If you're sending an invoice with a payment link, "Due on Receipt" also works exceptionally well because the client can pay immediately in one click, removing delays.

Can I charge late fees on overdue invoices?

In many jurisdictions, yes—but the fees must be reasonable and, ideally, agreed upon in advance in your contract. Include late fee language in your contract and on your invoice. A rate of 1–1.5% per month on the overdue balance is a common and generally acceptable practice. If you're unsure what's permitted in your area, consult a local business advisor or legal professional. It's important to understand your local regulations.

How do partial payments work on an invoice?

Partial payments allow a client to pay a portion of the total invoice amount at a time. For example, if your invoice total is $4,000 and the client pays a $2,000 deposit, a well-designed invoice shows $2,000 paid, $2,000 pending, and the status updates to "Partial." When the remaining balance is paid, the status changes to "Paid." This is incredibly useful for deposits, milestones, and phased project billing. An invoice app that supports partial payments, like FacturApp, handles this tracking automatically, saving you time and reducing errors.

Should I use a PDF invoice or an online invoice?

The best approach is both. A PDF invoice gives you a professional, branded document that the client can save, print, and reference for their records. An online invoice with a payment link makes paying effortless. Many freelancers generate a PDF from their invoice tool and share it via email or messaging apps, with a payment link included in the accompanying message. This combination gives clients a polished document and a frictionless payment path, which is the gold standard.

What happens if a client ignores my payment terms?

First, send a polite follow-up referencing the specific terms and due date on the invoice. A friendly message like "Just following up on invoice #123—the payment was due on [date]. Let me know if you have any questions" is usually sufficient. If payment remains outstanding, reference your late payment terms and consider whether to pause future work for that client until the account is settled. Having clear payment terms documented from the start makes these conversations much easier because you're referencing a mutual agreement, not making a personal demand.

Setting clear invoice payment terms isn't complicated, but it requires intentional effort. Choose terms that protect your cash flow, write them plainly on every invoice, make paying easy with a payment link, and track partial payments as they come in. Your future self—the one who gets paid on time instead of chasing invoices—will thank you for the professional systems you set up today.

The software development and automation team behind business systems like SHH LLC builds tools that help freelancers and service businesses streamline workflows from invoicing to payments. FacturApp is one of those tools—a mobile-first invoicing app focused on getting you paid faster.