Net 30 or Net 15? How to Choose Your Payment Terms

More than half of U.S. small businesses that give clients net 30 terms have overdue invoices; among those that ask for payment on receipt, about a quarter do. The figures come from QuickBooks' 2026 late payments report, a survey of U.S. business owners. It shows a link, not proof that shorter terms cause faster payment, but it's a good reason not to put "net 30" on every invoice out of habit. Here's what the common terms mean, what the law assumes when you say nothing, and how to choose.

What the Terms Mean

• Due on receipt: payment is due as soon as the client gets the invoice.
• Net 7, net 15, net 30, net 60: the full amount is due that many days later.
• 2/10 net 30: take 2% off if you pay within 10 days; otherwise the full amount is due in 30.

"Later than what?" is less settled than it sounds. Under the Uniform Commercial Code, credit on goods runs from shipment, and post-dating the invoice delays the start. EU law counts from when the client receives the invoice, and the UK's default runs from the later of the work or the client's notice of the debt. So don't make your client do the arithmetic: put the actual due date on the invoice, next to the terms.

What the Law Assumes When You Don't Say

Leave terms out and the law may fill them in, usually at 30 days:

• New York. The Freelance Isn't Free Act, statewide since August 2024 and in New York City since 2017, requires a written contract for freelance work of $800 or more (counting the last 120 days of work for the same client). If the contract names no pay date, payment is due within 30 days of finishing the work.
• Federal agencies. Under the Prompt Payment Act, an agency must pay within 30 days of receiving a proper invoice unless the contract says otherwise, and owes interest when it pays late: 4.75% a year for the second half of 2026.
• United Kingdom. Business invoices default to 30 days. After that, the Late Payment Act lets you claim interest of 8% plus the Bank of England base rate, and a fixed £40 to £100 per invoice depending on its size. Terms longer than 60 days hold only if expressly agreed and not grossly unfair, and a bill introduced in 2026 would cap them at 60 days, with limited exceptions.
• European Union. The Late Payment Directive also sets a 30-day default, with interest of at least 8 points above the central bank's reference rate.

This is general information, not legal advice; your contract and your state or country decide.

What Early-Payment Discounts Really Cost

More than they look. A client who skips "2/10 net 30" and pays on day 30 is, as economists Mitchell Petersen and Raghuram Rajan put it, effectively borrowing at 43.5% a year. Seen from your side, you're paying that rate to get your money 20 days sooner. They're also rarer than their fame suggests: in a study of 29,019 contracts between large buyers and their suppliers, 13% offered one (Klapper, Laeven and Rajan, 2012). We found no solid evidence that they make clients pay faster, so try shorter terms and reminders before giving away 2%.

How to Choose

• Start short. For new and smaller clients, due on receipt or net 15 is reasonable and easy to defend. You've already done the work.
• Meet large clients where they are. Big companies pay on their own schedule; in the Klapper study, about three in four contracts gave more than 30 days. If a client insists on net 45 or 60, agree in writing before you start, and price the wait in.
• Split long projects. A deposit up front and invoices at milestones beat one large net 30 invoice at the end.
• Say what happens when it's late. A clear late fee policy, agreed in advance, is fairer than a surprise. Our guide to late fees covers the rules.
• Follow up on a schedule. Xero's data from more than 32,000 U.S. small businesses shows invoices paid 8.5 days late on average in the second quarter of 2026. A friendly reminder before the due date costs nothing.

What BillGrid Does Today

In Settings, under Invoice Defaults, you choose when new invoices are due: upon receipt, or 7, 15, 30, 45 or 60 days after the invoice date. Net 30 is the default. Each new invoice gets the matching due date, printed on it, and you can change it on any invoice. Reminders are counted from each invoice's due date, on the schedule you pick, and they stop as soon as the client pays. With Stripe connected, clients can pay by card from the invoice, in full or in part. The help article on payment terms and reminders shows each setting.

Where We Think the Product Should Go Next

Writing this guide showed two gaps:

• Early-payment discounts. There's no "2/10" option today; a discount has to be applied by hand.
• Late fees. BillGrid doesn't add a late fee for you; you'd add it as a line on the invoice.