Invoice Payment Terms Explained: Net 30, Net 60, and More

Payment terms are the rules you set for when and how you expect to be paid. They're one of the most underutilised tools for improving cash flow — yet most small businesses just copy whatever their biggest client uses, often to their own detriment.

Common Payment Terms Explained

Which Terms Should You Use?

For most service businesses — trades, consultants, freelancers — Net 14 is the sweet spot. It's fast enough to maintain cash flow, and professional enough that clients don't balk. Net 30 is fine for established corporate clients where it's standard practice.

Early Payment Discounts

A 2/10 Net 30 term means: pay within 10 days, get 2% off; otherwise full amount due in 30. This can accelerate cash flow, but you're essentially paying 2% for 20 days of early payment. That works out to a ~36% annualised cost. Only offer it if cash flow is tight.

Late Payment Fees

Adding a late payment fee clause to your terms gives you leverage. A typical clause is 1.5% per month on overdue balances (18% annualised). You must disclose this in advance — either in your contract or on the invoice itself — for it to be enforceable.

How to Set Payment Terms in Matey

Go to Settings → Invoice Defaults → Payment Terms. Set your default and it'll appear on every new invoice automatically. You can override it per invoice for clients with different arrangements. You can also add custom payment instructions and bank details in the same section.