Payment terms state when an invoice is due. "Net 30" means the full amount is due 30 days from the invoice date. "Due on receipt" means immediately.
The clock starts from the invoice date, which is why invoicing late costs you twice — once in the delay, and once in the terms starting later.
What terms are normal
Households — due on receipt or on completion. There is no reason to offer credit to a residential customer.
Small commercial — net 14 or net 30.
Large commercial and public sector — net 30 to net 60, often non-negotiable, sometimes with their own payment run that adds weeks regardless of what the terms say.
Shorter terms get paid sooner
Not because customers are more diligent, but because most small businesses never chose their terms at all — they inherited net 30 from an invoice template.
Moving residential work to due-on-receipt and small commercial to net 14 shortens your cash conversion cycle without a single difficult conversation.
Say them at the quote
Terms introduced at the invoice feel like a surprise. Terms on the quote are part of the deal being agreed, and nobody objects.
Early payment discounts
Offering a small discount for fast payment — often written 2/10 net 30, meaning 2% off if paid within 10 days — buys cash at a cost.
Two percent for twenty days is expensive money in annual terms. Worth it if you genuinely need the cash, poor value as a standing policy.
Late fees
Legal in most places and rarely collected. Their value is as a stated term that makes chasing easier rather than as income.
The stronger control is not extending more credit to a customer who has not paid for the last job — see getting paid faster.