Key takeaways
- Payment terms must be stated on the invoice — without them, the client sets their own clock.
- Net 30 is the default for B2B; you can agree shorter terms (net 7, 14).
- The due date is the invoice date plus the terms — or 30 days after delivery if no date is stated.
- Under the Late Payment Act, interest runs from the day after the due date.
- Shorter terms and a clear due date get you paid faster — always put them on the invoice.
What are invoice payment terms?
Payment terms are the rules on an invoice that say when and how the client pays. The two essential pieces are the due date (when payment is expected) and the payment method (bank transfer, cheque, etc.). Everything else — late-payment interest, early-payment discounts, partial-payment terms — is optional but useful.
Without payment terms on the invoice, the legal default for B2B sales in the UK is 30 days after delivery of the goods or services, or 30 days after the customer receives the invoice, whichever is later. That means if you do not put a due date on the invoice, the client can legally sit on it for a month.
Common payment terms
- Due on receipt — payment expected immediately. Rare in B2B, common for small jobs.
- Net 7 / Net 14 — payment due 7 or 14 days after the invoice date. Short terms, fast payment.
- Net 30 — payment due 30 days after the invoice date. The B2B default.
- Net 60 / Net 90 — longer terms, usually agreed with larger corporate clients who insist on them.
- 50% deposit, 50% on completion — common for trades and project work.
Shorter terms get you paid faster, but they must be agreed with the client before you invoice. A corporate client whose accounts department runs on 60-day cycles will not pay in 7 days just because the invoice says so — agree the terms up front.
How to set the due date
The due date is the invoice date plus the payment terms. If you invoice on 1 October with net 14 terms, the due date is 15 October. Put the due date and the terms on the invoice — the due date is what the client sees, the terms explain how you arrived at it. Some clients only look at the due date; some only look at the terms; having both covers both.
What happens when payment is late
Under the Late Payment of Commercial Debts (Interest) Act 1998, once the due date passes and payment has not arrived, you can claim:
- Statutory interest at the Bank of England base rate plus 8% per year.
- Fixed compensation — £40 for debts under £1,000, £70 for £1,000-£10,000, £100 for £10,000+.
- Reasonable recovery costs — any cost of chasing the debt.
Most small businesses waive the interest to protect the relationship, but stating the right on the invoice — a line such as “Late payment interest applies under the Late Payment Act” — signals that you know your rights and encourages prompt payment.
Early payment discounts
An early-payment discount — for example, “2% discount for payment within 7 days” — is a way to speed up payment, but it only works if the client takes it. Most corporate clients ignore it and pay on their own schedule anyway. If you offer one, make sure it is clearly stated and that your invoice totals reflect the discounted price as the early-pay amount, with the full price as the default.
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Frequently asked questions
What payment terms should I put on my invoice?
State the due date and the terms (e.g. “Due 15 October 2026 — net 14”). Without terms on the invoice, the legal default for B2B is 30 days after delivery or receipt of the invoice, whichever is later.
What is net 30?
Payment due 30 days after the invoice date. It is the standard default for business-to-business transactions in the UK.
Can I charge interest on a late invoice?
Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can claim statutory interest at the Bank of England base rate plus 8% per year, plus fixed compensation, once the due date passes.
Should I offer an early-payment discount?
It can speed up payment, but most corporate clients ignore it and pay on their own schedule anyway. If you offer one, state it clearly and reflect it in the invoice totals.
What is the shortest payment term I can set?
You can set any terms you like, including “due on receipt” (immediate). The key is that the terms must be agreed with the client before you invoice, and stated on the invoice itself.
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General guidance only — not legal, tax or accounting advice. Rules and rates can change; check HMRC's current guidance for the latest. Last reviewed 8 October 2026.