Common payment terms
| Term | What it means |
|---|---|
| Due on receipt | Pay as soon as you get the invoice |
| Net 7 / Net 15 | Pay within 7 or 15 days of the invoice date |
| Net 30 | Pay within 30 days of the invoice date |
| EOM | Pay by the end of the month the invoice is dated |
| Net 30 EOM | Pay within 30 days after the end of the month |
| 2/10 Net 30 | 2% discount if paid within 10 days, otherwise full amount within 30 days |
| 50% advance | Half before work starts, the rest on delivery |
| COD | Cash on delivery |
Which terms should you use?
- New or one-time customers: due on receipt or an advance.
- Regular business customers: Net 15 or Net 30.
- Big projects: an advance, then payments at stages.
- Shops and walk-in sales: payment at the time of sale.
Rules in India and the UK
India: if you are a micro or small enterprise registered on Udyam, the MSMED Act says buyers must pay you within the agreed time, and never more than 45 days after accepting the goods or services. Late payment carries interest at three times the RBI bank rate. Buyers also lose an income tax deduction for MSE bills not paid on time.
UK: if no terms are agreed, payment is due 30 days after the customer receives the invoice or the goods. You can claim statutory interest of 8% above the Bank of England base rate on late business payments.
How to get paid faster
- Send the invoice the same day you deliver.
- Write a clear due date, not only "Net 30".
- Add every way to pay: bank details, UPI ID or a payment link.
- Send a polite reminder a few days before and on the due date.
- Offer a small discount for early payment if it suits you.