Invoice payment terms: examples and tips to get paid

Published Monday 20 April 2026

Table of contents

• What are invoice payment terms?
• Common types of payment terms
• How to write payment terms on your invoices
• Payment terms examples you can use
• Your legal rights with payment terms in the UK
• Short payment terms get you paid quicker
• Get clients on the clock quickly
• Chase payments with confidence
• Creating an invoicing system that works
• FAQs on invoice payment terms

Key takeaways

• Use shorter payment terms of 7 to 14 days instead of the traditional 30-day standard, as research shows this directly speeds up when you get paid and improves your cash flow.
• Include all essential details on every invoice, such as the due date, accepted payment methods, bank details, and your late payment policy, so customers know exactly what you expect and when.
• Send invoices immediately after completing work using templates and electronic delivery, as the sooner a customer receives your invoice, the sooner your payment clock starts.
• Chase payments before they become overdue by sending a reminder two to three days before the due date, and follow up promptly with a phone call if emails go unanswered.

Key takeaways

• Use shorter payment terms: request payment within 7 to 14 days instead of the outdated 30-day standard
• Send invoices immediately: use templates and electronic delivery to start your payment clock faster
• Include clear terms on every invoice: specify the due date, payment methods, bank details, and late fee policy
• Follow up before payments are due: send reminders two to three days before deadlines, not after

What are invoice payment terms?

Invoice payment terms are the conditions on your invoice that tell customers how and when to pay you. They set clear expectations and help you get paid faster.

Every invoice should include these key terms:

• Due date: when payment must be received
• Payment methods: which forms of payment you accept
• Payment details: your bank account number and sort code
• Late payment policy: penalties for overdue payments
• Currency: what currency you require for international work

The due date is your most important term. It determines when you get paid and directly affects your cash flow.

30-day payment terms are outdated. With electronic invoicing (which industry estimates suggest reduces invoicing costs by 60–80%) and online payments, you can reasonably expect payment within a week.

Common types of payment terms

Standard payment terms are shorthand codes that tell customers when payment is due. Here are the most common types:

• Net 7, Net 30, Net 60: payment is due within 7, 30, or 60 days of the invoice date
• Payment in advance (PIA): payment is due before you deliver goods or services
• Cash on delivery (COD): payment is due when goods are delivered
• End of month (EOM): payment is due by the last day of the invoice month
• Due on receipt: payment is due immediately when the invoice arrives

Choose terms that match your cash flow needs and what's standard in your industry.

How to write payment terms on your invoices

Write payment terms clearly so customers know exactly what you expect. Place them prominently on every invoice you send.

Include these details:

• Due date: state when payment is required, such as "Payment due within 14 days"
• Payment methods: list how customers can pay, such as bank transfer or credit card
• Bank details: provide your account number and sort code for transfers
• Late payment policy: specify any interest or fees for overdue payments

Keep the language simple and direct. Avoid jargon that could cause confusion.

Address invoices to the person who approves payments, not just your main contact.

Payment terms examples you can use

Here are sample clauses you can adapt for your invoices. Adjust the wording to match your business and industry.

• Standard payment terms: Payment is due within 14 days of the invoice date. Please make payment by bank transfer to the account details shown above.
• Late payment clause: Invoices not paid within the agreed terms will incur interest at 8% above the Bank of England base rate, plus debt recovery costs as permitted under the Late Payment of Commercial Debts Act.
• Deposit requirement: A 50% deposit is required before work begins. The remaining balance is due within 7 days of project completion.
• Early payment discount: Pay within 7 days to receive a 2% discount. Full payment is otherwise due within 30 days.
• Instalment terms: Payment may be made in three equal instalments: 33% on order, 33% on delivery, and 34% within 14 days of completion.

Choose the clauses that fit your situation and include them on every invoice.

Your legal rights with payment terms in the UK

UK law protects your right to be paid. For business-to-business transactions, customers must pay you within 30 days of receiving your invoice or goods, unless you've agreed different terms.

If payment is late, you can:

• Charge statutory interest: 8% plus the Bank of England base rate for business to business transactions
• Claim debt recovery costs: fixed compensation of £40 to £100 depending on invoice size
• Pursue the debt: through the small claims court if needed

Understanding your rights helps when discussing payment with clients. You can mention these protections in your payment terms to encourage prompt payment.

Learn more about your payment obligations and charging interest on commercial debt.

Short payment terms get you paid quicker

Shorter payment terms get you paid faster, even when some invoices go overdue. Research across millions of invoices shows clear patterns:

• 7-day terms: average payment arrives in two weeks
• 14-day terms: average payment arrives in two to three weeks
• 30-day terms: average payment arrives in one month

Nearly 75% of invoices now request payment within two weeks. Short terms have become the standard.

For large invoices, you may need to offer longer terms, though it's worth noting that signatories to the reformed Prompt Payment Code must now pay 95% of small businesses within 30 days. But if customers ask for discounts, consider offering faster payment terms instead.

Get clients on the clock quickly

Send invoices immediately to start your payment clock as soon as possible. The faster customers receive your invoice, the faster you get paid.

Speed up your invoicing process:

• Use templates: create a standard format you can reuse
• Send electronically: email invoices the moment work is complete
• Invoice on-site: use your phone to send invoices before you leave
• Avoid delays: never wait until the end of the week to invoice

Read the guide on invoicing and taking payment from customers.

Chase payments with confidence

Chase payments proactively rather than waiting for invoices to become overdue. A consistent follow-up process keeps cash flowing.

Build these steps into your routine:

• Send a pre-due reminder: email two to three days before payment is due
• Issue an overdue notice: email immediately when payment is late
• Make a phone call: follow up if emails get no response
• Stay persistent: keep contacting until payment arrives

To save time on manual follow-up:

• Use invoicing software: set up automatic reminder emails
• Ask your accountant: some will chase overdue clients on your behalf

Get more tips from the Advisory, Conciliation and Arbitration Service (ACAS) on handling unpaid customer invoices.

Creating an invoicing system that works

A good invoicing system saves time and improves cash flow. Basic tools like Microsoft Word become inadequate as your business grows and transaction volume increases.

Look for a system that can:

• Automate reminders: send payment notifications without manual effort
• Track payment status: see which invoices are paid, pending, or overdue at a glance
• Accept online payments: let customers pay by card or bank transfer directly from the invoice
• Generate reports: review your cash flow and identify payment patterns

The right system helps you get paid faster with less manual work.

FAQs on invoice payment terms

Here are answers to common questions about setting and managing invoice payment terms.

What are the best payment terms for small businesses?

Payment terms of 7 to 14 days work best for most small businesses. These shorter terms improve cash flow while remaining reasonable for customers. Match your terms to your industry standards and cash flow needs.

Can I charge interest on late payments?

Yes. UK law allows you to charge 8% plus the Bank of England base rate on late business-to-business payments. You can also claim fixed debt recovery costs of £40 to £100 depending on the invoice amount.

How do I get customers to pay faster?

Send invoices immediately after completing work, use clear payment terms, offer convenient payment methods, and send reminder emails two to three days before payment is due. Shorter payment terms also encourage faster payment.

Should I offer early payment discounts?

Early payment discounts can work if you need to improve cash flow quickly. A typical discount is 2% for payment within 7 days. However, consider whether shorter standard terms would work better without reducing your profit margin.

What should I do if a customer doesn't pay?

Send a reminder email as soon as payment is late. Follow up with a phone call if needed. If the customer still doesn't pay, send a formal debt collection letter citing your legal rights under the Late Payment of Commercial Debts Act. You can pursue the debt through the small claims court if necessary.