Invoice Payment Terms: Types, Legal Rules and Wording Examples

Net 0, due on receipt and immediate payment

These three phrases are close but not identical. Read literally:

• Net 0: zero days after the invoice date, so payment is due on the invoice date.
• Due on receipt (or "due upon receipt"): payment is due when the customer receives the invoice, which may be a day or more after the invoice date if it travels by post.
• Immediate payment: payment is expected at once, with no credit period. It says nothing about which day counts, so it is the least precise of the three.

Because the receipt date is not printed on the invoice, write the date itself: "Payment due on receipt, and no later than [date]". That removes any argument about when the invoice arrived.

Net 14 and Net 28

Net 14 means the full amount is due 14 calendar days after the invoice date; Net 28 means 28 days. Both are whole numbers of weeks, so the due date always falls on the same weekday as the invoice date: an invoice dated Thursday, 5 Mar 2026 is due on Thursday, 19 Mar 2026 under Net 14 and on Thursday, 2 Apr 2026 under Net 28.

• Net 14 wording: "Payment is due within 14 days of the invoice date, by [date]." Net 14 calculator and dates
• Net 28 wording: "Payment is due within 28 days of the invoice date, by [date]." Net 28 calculator and dates

What the law says about payment periods

Most payment periods are simply what the buyer and seller agree. The law steps in with a default payment period, or time frame, where nothing was agreed, and in some places with a ceiling on what may be agreed. One point matters when you compare them: the statutory clocks below mostly run from receipt of the invoice, delivery or completion of the work, while "Net N" on an invoice counts from the invoice date. Your contract decides which start date applies to your invoice. If you are new to invoicing, start with our guide on how to create an invoice.

What you may charge once a payment is late: the late fee calculator has a page for each US state with the statute quoted, and the maximum late fee by state compares the caps.

Not legal advice. The quotes above are the rules as published on the official sources linked; they do not cover every exception. Check the full text, or ask a lawyer, for your own contract.

Payment terms wording examples (copy-paste)

One line per term. Replace the brackets and always print the date next to the term. Each term's page has more wording and a table of dates.

Late payment terms: clause examples for invoices

Copy-ready clauses with placeholders only: fill in a rate or amount that your contract supports and that the law governing it allows. The maximum late fee by state and the state pages of the late fee calculator quote each US statute.

• Annual interest: "Amounts not paid by the due date bear interest at [rate]% per year from the due date until paid."
• Monthly rate with a cap: "Overdue balances are charged [x]% per month, not above the maximum allowed in [state]."
• Flat fee: "A late fee of [amount] applies to any invoice not paid by the due date."
• One-time percentage: "A one-time late charge of [x]% of the overdue amount applies to payments received after the due date."
• Grace period: "If payment is not received within [number] days after the due date, a late fee of [amount / x% of the overdue amount] will be added."

UK and EU invoices: the law already gives business creditors statutory interest and fixed compensation on late payments, and a contract rate can replace statutory interest. A plain reference is enough, for example "Late payments may attract statutory interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998" (UK) or "Late payments attract interest and compensation as provided by the law applicable to this contract" (EU). The rates and amounts are quoted in what the law says about payment periods.

Where payment terms go on the invoice

Put the term and the explicit due date where the customer's accounts payable team looks first: next to the invoice number and invoice date at the top, and again next to the total. Put the full clauses (late payment, discount, payment methods) in the terms area at the foot of the invoice.

The Master Glossary: Domestic & Commercial Codes

Short codes set expectations for Accounts Payable (AP) departments at a glance. More invoicing terms, such as net amount, amount due, maturity and E&OE, are defined in the invoice glossary.

Payment terms for commercial and international invoices

Cross-border sales add a second question on top of the due date: how the money moves and who carries the risk until it arrives. The U.S. International Trade Administration's Trade Finance Guide lists five methods of payment:

• Cash-in-advance: "an exporter can avoid credit risk because payment is received before the ownership of the goods is transferred."
• Letters of credit: "An LC is a commitment by a bank on behalf of the buyer that payment will be made to the exporter, provided that the terms and conditions stated in the LC have been met".
• Documentary collections: "the exporter entrusts the collection of the payment for a sale to its bank (remitting bank), which sends the documents that its buyer needs to the importer's bank".
• Open account: "a sale where the goods are shipped and delivered before payment is due, which in international sales is typically in 30, 60 or 90 days."
• Consignment: "payment is sent to the exporter only after the goods have been sold by the foreign distributor to the end customer."

Source: trade.gov, Methods of Payment · verified 25 Sep 2026

The shipping document itself is covered in the commercial invoice guide, and you can fill one in with the commercial invoice generator. For wider cross-border rules, see our guide to international invoicing.

Financial Strategy: The "2/10 Net 30" Discount

The term "2/10 Net 30" is a trade credit discount used in B2B invoicing.

Calculating Net 30 Late Fees & Interest (Legally)

Charging interest on overdue Net 30 invoices must be mathematically correct and disclosed in your terms. Keep in mind that late fee limits vary by state, so always verify your rate against the statute that applies before charging it.

Which day is the first late day? Count the term from the invoice date, then take the next day: an invoice dated Saturday, 31 Jan 2026 on Net 30 is due on Monday, 2 Mar 2026, and payment is late from Tuesday, 3 Mar 2026. The EU Late Payment Directive uses the same logic for agreed terms: interest runs "from the day following the date or the end of the period for payment fixed in the contract" (Directive 2011/7/EU, Art. 3(3)(a)). Where a statute sets a later start day, the state page says so; the methods and the Texas and Virginia start rules are covered in how to calculate late fees. To see how many days past due each of your open invoices is, use the invoice aging calculator.

⚠️ Compliance Warning: Do not guess your interest rate. Usury laws in California, New York, Texas, Florida, and other states differ significantly. The consequences of charging above a cap are set by each state's usury statute — see the cited statute. See our state-by-state late fee guide below for details, and always verify with the statutory rate defined by your local government.

Late Fee Limits by State

What you can charge on an overdue Net 30 invoice depends on state law twice over: a default statutory rate applies when your contract never mentions interest, and a separate written-contract ceiling (or none at all) applies when it does. Five states as a preview, pulled straight from our statute-linked reference table (all states side by side: maximum late fee by state):

Every state name links to its own page — statute citation, official source link and the exact conditions — and all of them are in our late payment interest table covering all 50 states + DC. The rates come from the cited statutes, not estimates: see how we verify this data. Put your late-fee terms in the written agreement as well as on the invoice, and check the cited statute for the state whose law applies to the contract.

Important Disclaimer: This information is educational, not legal advice. Late-fee rules change and vary by industry, contract type, and transaction amount — confirm against the cited statute or a licensed attorney in your jurisdiction.

Professional Collection Scripts (Copy-Paste)

Escalation should be firm but preserve the relationship. We have expanded these scripts to cover the entire lifecycle.

Frequently Asked Questions (Payment Terms & Law)