Best Practices
Payment Terms That Work: Net 7, 15, 30, or 60?
How to choose payment terms for your business and industry—net 7 vs net 30—and when to offer early-payment discounts.
M
Mike Davis
Sales Expert
·2 min read
Payment Terms That Work: Net 7, 15, 30, or 60?
Payment terms directly affect cash flow. Too generous and you wait months for money; too strict and you risk losing clients. Here’s how to choose terms that work for your business and get you paid faster.
Know the Norm in Your Industry
Industry standards shape client expectations:
- Creative services and freelancers – often Net 14–21
- Construction and trades – Net 30 is common; retention may extend effective payment
- Manufacturing and wholesale – Net 45–60 is typical
- SaaS and subscriptions – monthly auto-charge, due on renewal
Set terms that align with norms but still protect your cash flow. If you need faster payment, start with Net 15 or Net 7 and negotiate from there. For more on invoice structure, see our guide.
Use Terms Strategically
Net 7 – Best for freelancers, small projects, and clients who pay quickly. Speeds up invoice turnaround.
Net 15 – Good middle ground. Pair with a small early-payment discount (e.g. 2% for payment within 7 days) to incentivise faster payment.
Net 30 – Standard baseline for many B2B businesses. Include it clearly on every quote and invoice so clients know the rules upfront.
Net 60 – Reserve for enterprise clients or large contracts where the deal justifies the wait. Document it in the contract and invoice.
For recurring work, terms are often Net 7 or “due on receipt” so you’re not carrying 30 days of recurring invoices as receivable.
Put Terms in Writing
Include payment terms in proposals, contracts, and every invoice. State the due date explicitly—“Payment due by 15 March 2025”—not just “Net 30.” Mention late fees or early-payment discounts if you offer them. Repetition prevents “I didn’t know” conversations. For invoice design tips, see where to place payment instructions.
Enforce With Consistency
If you waive late fees once, document it as a one-time courtesy. The goal is to remain friendly yet firm so clients treat your invoices with respect. Automated payment reminders at +7, +14, and +21 days keep follow-ups professional and consistent without awkward emails. For South African businesses, see our financial habits guide on payment options and reminders.
Choosing the right terms balances competitiveness with sustainability. Plurgo lets you set payment terms on every quote and invoice, with reminders that run automatically. Get started for free.