Definition
Payment terms cover the time the customer has to pay (e.g. Net 7, Net 30), the accepted payment methods, any discount for early payment, and any late fees or interest charged for missed deadlines.
Common shorthand: 'Net 30' means due in 30 days from the invoice date. '2/10 Net 30' means a 2 percent discount if paid within 10 days, otherwise the full amount in 30 days. 'Due on receipt' means due immediately. Terms should appear on every invoice in plain language, not just in the master contract.
Why it matters
Payment terms set expectations and define your cashflow. Shorter terms mean faster cash but can deter price-sensitive customers; longer terms lock up your cash but may win larger contracts. The wrong default term, repeated across hundreds of invoices, is the biggest single lever on working capital that most small businesses ignore.
Where this appears in your tools
Set your default terms in your business profile inside the workspace; override per invoice when needed. The invoice generator surfaces them in the payment instructions block automatically.
Example
A consultancy switches its default from Net 30 to Net 14 for new customers. Average days-to-pay drops from 38 to 22, freeing roughly half a month of working capital across the customer base — without losing a single account.
Common confusion
Buyers often interpret 'Net 30' as 30 days from when they received and approved the invoice, not from the issue date. To prevent this, state both the term and the explicit due date on the invoice itself.