- Net 30 means the invoice is due 30 days after the invoice date. Due on receipt means now.
- Homeowner work usually runs on a deposit and payment when the job is done. Net terms are mostly for commercial customers.
- Write the due date as a date on every invoice, list every way to pay, and say what happens if it is late.
What the common terms mean
| Term | When the money is due | Where it fits |
|---|---|---|
| Due on receipt | When the customer gets the invoice | Service calls, small repairs, anything done in a day |
| Due on completion | When the work is finished | Homeowner jobs with no progress payments |
| Net 7, net 15 | 7 or 15 days after the invoice date | Repeat residential customers, small businesses |
| Net 30 | 30 days after the invoice date | Property managers, general contractors, commercial accounts |
| Deposit and balance | Part when signed, the rest at the end | Jobs with materials to buy up front |
| Progress payments | At stages written into the contract | Remodels and anything that runs for weeks |
The number after "net" counts calendar days from the invoice date, not from the day the customer opens it. That is why the date you send the invoice matters as much as the term.
Terms for homeowner work
Most homeowners expect to pay when the job is done, and many pay faster when you make it easy. Net 30 on a residential job mostly means waiting 30 days for money the customer could have paid on the spot.
- Small jobs: due on completion, with a way to pay by card or bank on the spot.
- Jobs with materials: a deposit at signing, the balance at completion. Some states cap deposits on home improvement work, so check yours.
- Long jobs: progress payments tied to stages anyone can see, such as rough-in passed or cabinets set, with the last payment at completion.
Put the schedule on the estimate the customer signs, not only on the invoice. Nobody argues with a payment schedule they already agreed to.
Terms for commercial customers and general contractors
Businesses run on payables cycles. A property manager or general contractor may only cut checks on set days, and net 30 is common. Ask how their payables work before you quote, and price the wait into the job.
- Get a purchase order or work order number before you start, and put it on the invoice. Invoices without one often sit in a pile.
- Ask who approves invoices and send it to that person, not only to the site contact.
- On subcontract work, read the payment clause. Pay-when-paid and pay-if-paid clauses tie your money to the owner paying the general contractor.
- Keep your lien deadline in mind. Waiting politely past it can cost you your strongest way to get paid.
How to write payment terms that get paid
- A date, not a phrase. "Due October 24" beats "net 15". Write both if the customer is used to net terms.
- Every way to pay. Card, bank transfer, check, with the link or the mailing address.
- Late fees, if you use them, stated on the estimate and the invoice before the work. States limit late fees and interest differently, so check yours.
- Who to call with a question, so a question does not become a reason to wait.
When an invoice goes past due
Most late invoices are forgotten, not refused. A short reminder the day after the due date, a firmer one a week later and a final notice after that recovers most of them. Our past due invoice letters have all three, ready to copy.
In Koira, every invoice carries a pay link, and Koira has the reminders ready when an invoice goes past due, so you are not the one keeping track.
Published September 17, 2024. This page is general information, not legal or tax advice. Rules change and differ by state and city, so confirm with the agency named before you act.