Common Payment Terms
Payment terms tell your client when you expect to be paid. Using standard terminology makes expectations clear and looks professional. Here are the most common terms you'll encounter:
Due on Receipt
Payment is expected immediately upon receiving the invoice. This term is most appropriate for small, one-off projects or when working with new clients where you want to minimise risk.
Net 7
Payment is due within 7 days of the invoice date. A short but reasonable window that balances cash flow needs with client convenience.
Net 14
Payment is due within 14 days. This is the most common term for UK freelancers. It gives clients time to process the invoice while keeping your cash flow healthy.
Net 30
Payment is due within 30 days. Standard in corporate environments, but can strain freelancer cash flow. Larger clients often insist on these terms.
Net 45 / Net 60
Extended payment windows sometimes demanded by large corporations. Consider whether you can afford to wait this long, or negotiate milestone payments.
End of Month (EOM)
Payment is due at the end of the month following the invoice. For example, an invoice dated 15 January would be due 28 February.
💡 What Does "Net" Actually Mean?
"Net" in payment terms refers to the full amount owed, without any deductions. "Net 30" means the full invoice amount is due in 30 days. Some terms include early payment discounts like "2/10 Net 30" — meaning 2% discount if paid within 10 days, otherwise full amount due in 30 days. These discount terms are less common in UK freelancing but you may encounter them with American clients.
How to Choose the Right Terms
Your payment terms should balance your cash flow needs with client expectations. Consider these factors:
Your cash flow requirements:
If you have regular monthly expenses (rent, subscriptions, subcontractors), you need predictable income. Shorter payment terms like Net 7 or Net 14 help ensure money arrives when you need it.
Client type and size:
Small businesses and startups can typically pay quickly. Large corporations have rigid accounts payable cycles that may require Net 30 or longer. Understand your client's processes before quoting.
Project value:
For large projects, consider milestone billing rather than one invoice at the end. This reduces your financial risk and improves cash flow throughout the project.
Industry norms:
Research what's standard in your sector. Design agencies might accept Net 30 as normal, while consultants often invoice on shorter terms.
Your leverage:
When you're in demand, you can set stricter terms. Early in your career or with dream clients, you might offer more flexibility.
Risk profile:
New clients represent higher risk. Consider requiring payment upfront or on shorter terms until you've established trust. Regular clients with good payment history might be granted longer terms.
Late Payment Interest (UK Law)
UK law gives you the right to charge interest and claim compensation when business clients pay late. The Late Payment of Commercial Debts legislation protects freelancers and small businesses.
Statutory interest rate:
You can charge 8% per year above the Bank of England base rate. For example, if the base rate is 4%, you can charge 12% annual interest on overdue amounts.
Compensation for debt recovery:
You can claim a fixed sum on top of interest:
- £40 for debts up to £999.99
- £70 for debts between £1,000 and £9,999.99
- £100 for debts of £10,000 or more
When to apply these charges:
Interest starts accruing from the day after the agreed payment date. You don't need to warn clients in advance — it's a statutory right. However, including a clause about late payment interest in your terms and conditions reinforces the expectation.
💡 Invoice Late Payment Clause
Add this statement to your invoices: "We reserve the right to charge statutory interest on late payments at 8% above the Bank of England base rate, plus compensation for debt recovery costs, in accordance with the Late Payment of Commercial Debts legislation."
Should you actually charge interest?
It depends on the relationship. For a valued long-term client who occasionally pays a few days late, charging interest might damage the relationship. For persistent late payers or one-off clients, it's entirely appropriate. Use your judgement.
Setting Client Expectations
Clear communication about payment expectations prevents disputes and delays. Here's how to set expectations properly:
State terms before work begins:
Include payment terms in your quote or proposal. Clients should know when payment is expected before they agree to work with you. Don't surprise them with terms on the invoice.
Include terms in your contract:
A formal contract should specify payment terms, accepted payment methods, and consequences of late payment. This creates a legal foundation for your expectations.
Be explicit on invoices:
State both the payment terms and the actual due date. "Net 14 — Due by 24 February 2026" leaves no ambiguity.
Discuss during onboarding:
For new clients, briefly discuss payment expectations during your initial conversations. "I invoice upon completion with Net 14 terms — does that work with your processes?"
Send reminders:
A friendly reminder 2-3 days before the due date can prompt payment before it becomes late. Many invoicing tools automate this.
Payment Terms Best Practices
Optimise your payment terms strategy with these proven practices:
Use specific due dates:
"Due by 24 February 2026" is clearer than "Net 14". Clients are more likely to pay by a specific date they can put in their calendar.
Request deposits for large projects:
A 30-50% deposit on projects over £1,000 protects your cash flow and confirms client commitment. Frame it as standard practice: "I require a 50% deposit to secure your slot in my schedule."
Consider upfront payment for new clients:
Until you've established trust, payment upfront or upon delivery reduces risk. Many freelancers require full payment in advance from clients they haven't worked with before.
Offer payment plans for large invoices:
Breaking a £5,000 invoice into two or three payments can make it easier for clients to pay and may actually speed up the first payment.
Make paying easy:
Accept multiple payment methods — bank transfer, card payments, PayPal. Include payment links on invoices. The easier it is to pay, the faster you'll be paid.
Invoice promptly:
Send invoices immediately upon completion. Delays in invoicing lead to delays in payment and suggest you're not that bothered about being paid quickly.
Negotiating Payment Terms
Sometimes clients request different terms than you'd prefer. Here's how to negotiate effectively:
Understand their constraints:
Large companies often have rigid payment cycles. If they only process payments on the 15th and 30th of each month, a Net 7 term may not be practical for them.
Counter with alternatives:
If a client insists on Net 60, propose milestones: "I'm happy to agree to Net 60 if we can structure the project with 30% upfront, 30% at midpoint, and 40% on completion."
Adjust pricing:
Longer payment terms have a cost — your money tied up, your cash flow affected. It's reasonable to factor this into pricing: "I can offer Net 60 terms, but my rate would need to reflect the extended payment cycle."
Know your limits:
Decide in advance what terms you won't accept. If Net 90 would cause genuine financial problems, don't agree to it regardless of who's asking.
💡 Negotiation Script
"I typically work on Net 14 terms to keep my project pipeline moving. I understand your standard is Net 60 — could we meet in the middle with Net 30, or structure payments around project milestones so cash flow works for both of us?"
Payment terms are part of your overall value proposition. Professional freelancers set clear expectations and are confident in their terms. Most clients respect that — and those who don't may not be clients worth having.