Summary
Invoice terms and conditions are the rules on an invoice that set out when and how a customer must pay, and what happens if they pay late, covering the due date, accepted payment methods, any deposit, and any late fee. The 12 templates below cover each case and can be copied, mixed or downloaded.
- The fix: Clear terms, agreed in advance and repeated on the invoice, are what customers who see half as many late invoices in the first 30 days have in common.
- The default: Net 30 (payment due within 30 days) is the common default; shorter terms and a deposit reduce risk.
- The automation: Paidnice applies the payment terms, late fees and interest you set automatically in Xero and QuickBooks, and sends the reminders.
You do not need a lawyer to write payment terms. Pick a template below, swap the bracketed details for your own, and you are done. This article is general information, not legal advice. For wording specific to your industry or country, check with a qualified professional.
Want yours written for you? Set your preferences and copy a ready paragraph.
Payment terms generator
Set your preferences and copy a ready-to-use payment terms paragraph for your invoices, quotes or contract. Edit the wording to fit your business.
General wording, not legal advice. For important contracts, have your terms reviewed by a professional.
What should payment terms say on an invoice? Keep it to one clear line stating the due date, the amount, how to pay, and any late fee, for example: “Payment due within 30 days. A late fee of $25 applies to overdue balances.” Use the fuller versions below for quotes and contracts, and see examples of payment terms to write on the invoice itself for Net 30, deposit, early-discount and industry wording.
Before you set your own terms, it is worth checking how long customers in your industry actually take to pay.
Free: Payment reminder email templatesCopy the reminder emails for before, on and after the due date.12 payment terms and conditions templates (copy, mix and match, or download)
Copy any template straight into your invoice, quote or contract. You can also tick several to mix and match them into one set of terms, then copy the selection or download it as a PDF or editable Word file (both are generated instantly in your browser, no sign-up). Replace anything in [square brackets] with your own details.
Payment is due within [30] days of the invoice date (Net 30). Please pay to the account details shown and quote invoice number [#INV-0000]. Overdue balances may be subject to a late fee as set out in our terms.
Payment is due on receipt of this invoice. Please settle the full amount of [$0.00] within [7] days to avoid a late payment fee.
This quote is valid for [30] days from the date above. Acceptance confirms agreement to our payment terms: a [50%] deposit to begin work, with the balance due within [14] days of completion.
A deposit of [50%] (or [$0.00]) is required before work begins. The remaining balance is due [on completion / within 14 days of the final invoice]. Work will not commence until the deposit is received in cleared funds.
Fees are invoiced in [three] stages: [30%] on commencement, [40%] at [the agreed midpoint], and [30%] on completion. Each invoice is payable within [14] days. Work on the next stage begins once the prior invoice is paid.
Services are billed [monthly] in advance at [$0.00] per [month]. Invoices are issued on the [1st] and payable within [7] days. The agreement renews automatically each [month] until canceled with [30] days' written notice.
Approved account customers are granted [Net 30] credit terms from the invoice date. Credit limits are set at our discretion and may be reviewed. Accounts that exceed their limit or terms may be placed on hold until cleared.
Overdue balances are subject to a late fee of [$25] and interest at [3% per month / the statutory rate], charged daily until paid. We reserve the right to suspend work and to recover reasonable costs of collection on overdue accounts.
We accept payment by [bank transfer, credit or debit card, and direct debit]. Card payments may carry a surcharge of [up to 2%]. Please do not send cash. Payment is treated as received only once cleared funds reach our account.
Progress claims are submitted [monthly] and payable within [14] days of the claim date. A retention of [5%] may be held until [practical completion / the end of the defects period]. Variations must be agreed in writing before work proceeds.
Full payment is taken at checkout before your order is processed. Prices include [VAT/GST] where applicable. Orders are dispatched within [2 business days] of cleared payment. See our refund policy for returns and cancellations.
Payment due within [30] days. A late fee of [$25] applies to overdue balances. Thank you for your business.
Tip: tick several templates to mix and match them into one set of terms, then copy or download. Replace anything in [square brackets] with your own details.
Not sure your terms cover everything? Run through the checklist.
What to include in your payment terms
A complete set of payment terms and conditions usually covers these eight points. Use it as a checklist.
- Payment window. When payment is due, for example due on receipt or Net 30.
- Accepted methods. How customers can pay, and any card surcharge.
- Deposit or advance. Any up-front payment needed before work starts.
- Late fees and interest. What happens, and at what rate, when an invoice is overdue.
- Currency and tax. The currency you bill in and whether VAT or GST applies.
- Quote validity and references. How long a quote stands and how to reference the invoice.
- Retention of title. For goods, that ownership passes only once paid in full.
- Disputes and cancellations. How queries, refunds and cancellations are handled.
What is Net 30? Net 30 means payment is due within 30 days of the invoice date. It is the most common default for business invoices. Net 7 and Net 14 are shorter, Net 60 is longer, and “due on receipt” means pay straight away. More terms below.
Common types of payment terms, explained
These are the standard terms and abbreviations you will see on invoices and quotes.
| Term | What it means |
|---|---|
| Due on receipt | Payment is expected as soon as the invoice is received. |
| Net 7 / 14 / 30 / 60 | Payment is due within that number of days of the invoice date. |
| EOM | Payment is due at the end of the month the invoice is issued. |
| 2/10 Net 30 | A 2% discount if paid within 10 days, otherwise the full amount is due in 30. |
| CIA (cash in advance) | Full payment before any goods or services are provided. |
| COD (cash on delivery) | Payment is due at the point the goods are delivered. |
| 50% upfront | Half is paid before work begins, with the balance on completion. |
| Line of credit / account | Agreed ongoing credit terms for approved repeat customers. |
For construction retention terms, see Progress claims and retentions in Xero: how to invoice and chase them.
What payment terms belong in website terms and conditions for online and subscription sales?
Online and subscription payment terms usually sit inside your website terms and conditions as well as on the invoice itself, covering when payment is taken, the billing cycle, accepted methods, and what happens on a failed or late payment. Cover these five points so there is no ambiguity at checkout or renewal:
- When payment is taken. At checkout, on dispatch, or on a recurring billing date. State it plainly.
- Subscriptions and renewals. The billing cycle (monthly or annual), that it renews automatically, and how to cancel.
- Accepted methods and currency. Which cards, wallets and currencies you take, and any processing surcharge.
- Cancellations and refunds. Whether and how an order or subscription can be canceled, and your refund position.
- Failed and missed payments. What happens if a card is declined or a payment is late: a grace period, a reminder, a late fee, or suspended access.
A customer agrees to these the moment they check out or accept your terms, which is what makes them enforceable.
What makes payment terms that actually get paid?
Payment terms that get paid are short, specific and consistently enforced, with a firm due date, a short payment window, and a stated late fee that is actually applied. The biggest levers:
- Be specific with dates. “Payment due 30 days after delivery” beats “Net 30” for clarity. Vague terms are hard to enforce.
- Keep the due date off a weekend. Inside the same business, on-time payment is about 3 percentage points lower when the due date falls on a Saturday or Sunday (Paidnice payment terms statistics). In New Zealand it is about 8 percentage points lower. See our due date data.
- Shorten the window. Moving from 30 days to 14 or 21 days, or asking for due-on-receipt from new clients, gets you paid sooner. Paidnice data shows the same customer pays a 14-day invoice 9 days sooner than a 30-day invoice, with no rise in unpaid invoices. See our payment terms data.
- Take a deposit on bigger jobs. Up-front money reduces your exposure and signals commitment.
- Reward early payment. A small discount for paying early (for example 2/10 Net 30: 2% off if paid within 10 days) pulls cash forward.
- Include a late fee, and enforce it. A stated late fee or interest only works if it actually follows. Keep the tone polite but firm. Xero cannot add interest to a late invoice by itself: the request on Xero's product ideas board, posted 29 March 2012, has 1,114 votes and status Accepted, and Xero's Community Manager confirmed on 7 July 2025 that there are no committed plans.
- Offer flexible ways to pay. The more payment options, the faster customers tend to pay.
- Enforce it every time. Terms only work if the reminders and fees follow on every invoice. Doing that manually is where most businesses give up, which is exactly what Paidnice automates.
Do not count on payment on the due date. Only about 13% of paid invoices are paid on the due date itself. More arrive in the week after it (about 19%).
Plan for the slip as well. In every market Xero Small Business Insights measures, the average small business invoice is paid after its due date: 6.7 days late in Australia, 8.3 in the UK, 8.2 in the US and 10.9 in Canada. Set the due date earlier than the day you need the cash, and let reminders and the late fee close the gap.
| Country | Days paid late | Year on year |
|---|---|---|
| New Zealand | 4.6 days | -0.5 days |
| Australia | 6.7 days | -0.3 days |
| US | 8.2 days | -0.2 days |
| UK | 8.3 days | -0.3 days |
| Canada | 10.9 days | +1.8 days |
Source: Xero Small Business Insights, September 2026. See the full data on the Paidnice accounts receivable statistics dashboard.
One caveat. These templates cover the vast majority of small-business situations, but they are not a substitute for a lawyer when the stakes are unusual: a large supply agreement, anything with significant liability or intellectual property, or terms you intend to enforce in a jurisdiction you do not operate in. For everyday invoicing, the templates above are enough. For the unusual cases, use them as a starting point and have a professional check the wording.
Which payment terms fit your business?
Start with the terms that match how you bill.
| Your business | Start with | Watch out for |
|---|---|---|
| Agencies | Interest on the whole overdue balance, media recharges included. | Media spend you front for a client. Name it in the late clause. |
| MSPs | Monthly agreements billed in advance, net 14, on autopay (our recommendation). | Licenses you resell stay on your bill if a client stops paying. Microsoft new commerce licenses can be canceled only within seven days of purchase or renewal, so chase before the renewal date. |
| Wholesale and distribution | Trade terms with a finance charge in the credit application. | Slow trade payers. Australian wholesale waited 31.2 days to be paid in September 2026, against 24.2 for all industries (Xero). |
| Construction trades | A due date on every claim and a written retention release date. | Security of payment laws, such as the UK Construction Act 1996, can set when a claim is due if your contract has no adequate payment terms. |
What legally has to be on an invoice?
Most countries require an invoice to show the seller's name and address, an invoice number and date, a description of the goods or services, the amount due, and any tax charged. Payment terms are not usually a legal requirement, but they are what makes a late invoice enforceable, because the customer agreed to them before the work started. Tax invoices carry extra rules: a UK VAT invoice needs the VAT number and the VAT amount per rate, and an Australian tax invoice over A$1,000 needs the buyer's identity or ABN. Rules vary by country, so check your local requirements for anything beyond the basics. The templates on this page cover the payment terms, not the full statutory invoice checklist.
Payment terms and conditions: FAQ
What are payment terms and conditions?
Payment terms and conditions are the rules for how and when a customer pays you. They set the payment window (such as Net 30), accepted methods, any deposit, and what happens if an invoice is late. Agreed in advance, they make your invoices easier to enforce.
What is a good standard payment term?
Net 30 (payment due within 30 days) is the most common default for business invoices. Use shorter terms like Net 7 or due on receipt for new customers or smaller jobs, and add a deposit for larger projects.
Can I download these templates in Word, PDF or Excel?
Yes. Use the buttons above to download all 12 templates as a PDF or an editable Word (DOCX) file. For a spreadsheet, copy any template and paste it straight into Excel or Google Sheets.
What should the payment terms on an invoice say?
Keep it to one clear line, for example: "Payment due within 30 days. A late fee of $25 applies to overdue balances." State the due date, the amount, how to pay, and any late fee. The generator above builds this for you.
How do I write advance or deposit payment terms?
State the deposit as a percentage or fixed amount, that it is due before work begins, and when the balance is payable. For example: "A 50% deposit is required before work begins, with the balance due within 14 days of completion."
Are payment terms legally binding?
They are binding when the customer has agreed to them in advance, usually by accepting your quote, contract or terms of service. Repeating them on each invoice reinforces the agreement but does not replace it.
What payment terms work best with late payers?
Shorter terms, a clear late fee, and a deposit. Net 7 or due on receipt, a stated late fee or interest rate, and an up-front deposit all reduce the time and amount you are exposed to. Automating reminders and fees keeps the policy consistent.
Keep reading
Put your payment terms on autopilot
Paidnice applies your payment terms, late fees and interest automatically in Xero and QuickBooks, sends the reminders, and keeps a full audit trail, so the terms you just set actually get followed on every invoice. Customers who enforce their terms this way see half as many late invoices in the first 30 days.
On Xero or QuickBooks? Sign up to Paidnice free, no credit card required, and stop chasing payments.
Written by Denym Bird, co-founder and CEO of Paidnice, which helps thousands of small businesses get paid on time. Reviewed for accuracy and updated for 2026. This article is general information, not legal advice.
Paidnice features in this article
About the editorial team
Denym started Paidnice in 2022 after customers paying late left his own business short on payroll. He has led it to $1 billion collected on time across more than 1 million invoices, and writes about credit control, late fees and getting paid on Xero and QuickBooks.
Ashley is a co-founder and lead developer of Paidnice and has built accounting software for more than 10 years. He builds the ledger connections that put reminders, late fees and payments into Xero, QuickBooks and ERPs such as NetSuite and Business Central. Before Paidnice he co-founded A2X, ecommerce accounting software for Xero and QuickBooks.
App of the Year