How Long Does a Client Have to Pay an Invoice? (Payment Terms Explained)

Payment terms define how long a client has to pay after receiving your invoice. They are written as “Net X” — meaning the full balance is due within X calendar days of the invoice date.

The most common terms in use today:

• Due on receipt — Payment expected immediately, common for one-off retail or digital purchases.
• Net 7 — 7 calendar days. Used by freelancers working with quick-turnaround projects or trusted repeat clients.
• Net 14 / Net 15 — Two weeks. A practical middle ground that is fast enough to protect cash flow without feeling aggressive.
• Net 30 — 30 days. The traditional business default, widely accepted by corporate clients.
• Net 60 — 60 days. Common in manufacturing, wholesale, and large enterprise procurement.
• Net 90 — 90 days. Typically reserved for very large accounts or government contracts. Requires careful cash-flow management.

Some businesses also offer early-payment discount terms such as “2/10 Net 30” — meaning a 2% discount applies if the client pays within 10 days, otherwise the full amount is due in 30 days. This can be highly effective at accelerating payment from cash-rich clients.

Whatever terms you choose, they only have legal weight if they appear on the invoice itself and, ideally, in your signed contract. See our guide on freelance contract payment terms for the exact language to use.

When no payment terms are stated, or when the invoice is disputed, the law provides a backstop. Here is what applies in three major markets.

United Kingdom

The Late Payment of Commercial Debts Act 1998 governs B2B invoices. Key rules:

• Default payment period: 30 days from the date the invoice is received or the goods/services delivered, whichever is later.
• Parties can contractually extend this up to 60 days. Anything longer is only valid if it is not “grossly unfair” to the supplier.
• Statutory interest on late B2B debts: 8% + Bank of England base rate per annum — no prior agreement needed.
• You can also claim a fixed debt recovery charge (£40 for debts under £1,000; £70 for £1,000–£9,999; £100 for £10,000+).

United States

There is no single federal law governing commercial payment terms. Rules vary by state, but in practice:

• Most states treat 30 days as the implied reasonable payment period when none is stated.
• Contractual late-fee rates must comply with state usury laws — typical caps are 1.5%–2% per month.
• Some states (e.g., California, New York) have specific Prompt Payment Acts covering government contracts, often requiring payment within 15–30 days.
• For consumer invoices (B2C), the Fair Debt Collection Practices Act (FDCPA) applies additional rules once you escalate to collections.

Australia

Australia’s Payment Times Reporting Act 2020 requires large businesses to publish their payment terms and report how quickly they actually pay small business suppliers. Key defaults:

• No single statutory default, but courts typically treat 30 days as reasonable.
• The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) recommends a maximum of 30 days for small business invoices.
• Large businesses (annual turnover >$100M) must publicly report their payment terms — which creates reputational pressure to pay promptly.

The right payment terms depend on your business type, client size, and cash-flow position. Here is a practical breakdown.

The freelancer rule of thumb: Start at Net 14. Only extend to Net 30 if a client requires it, and only accept Net 60+ if the project fee is large enough to justify the wait — and you have built a finance buffer. Never accept longer terms than you can sustain operationally.

If a client insists on 60 or 90 days, you can counter-propose a milestone payment structure: 50% upfront, 50% on completion. This is far more favourable than waiting 90 days for the full amount.

This is one of the most common mistakes freelancers and small businesses make — sending an invoice with no due date. Here is what happens in practice.

Legally: The law typically implies a “reasonable time” standard, which courts in the UK, US, and Australia have consistently interpreted as around 30 days. However, “reasonable” is vague — a determined non-payer can argue the point.

Practically: Without a stated due date, clients have no psychological prompt to pay. Research consistently shows that invoices with explicit due dates are paid significantly faster than those that just say “please pay at your earliest convenience.”

What to do if you have already sent an invoice without terms:

1. Send a follow-up email stating: “As we did not specify a due date, please treat this invoice as due within 30 days of the invoice date, i.e., by [date].”
2. If you can, resend the invoice with a due date added and ask for confirmation that the updated version has been received.
3. For future invoices, always include “Payment due: [date]” or “Payment terms: Net 30” in a prominent location.

See also: practical ways to avoid late payments before they start.

Having payment terms means nothing if you do not act when they are breached. Here is a practical enforcement sequence.

Step 1 — Pre-due-date reminder (3–5 days before)

Send a brief, friendly email confirming the invoice is due shortly and providing payment details. This catches administrative delays before they become problems.

Step 2 — Overdue notice (1–3 days after due date)

Prompt follow-up signals that you track your invoices. Keep the tone professional and assume positive intent — the first reminder is often enough. Reference the invoice number, amount, and due date explicitly.

Step 3 — Firm follow-up (7–14 days overdue)

Escalate in tone. Mention your late-fee policy if applicable. Request an update on when payment will be made. Consider calling as well as emailing.

Step 4 — Formal letter before action (30+ days overdue)

In the UK this is a “Letter Before Action” — required before filing a small claims court case. In other jurisdictions it is known as a demand letter. See our overdue invoice letter templates for word-for-word examples.

Step 5 — Legal action or debt collection

UK: Small Claims Court (Money Claim Online) for debts up to £10,000. US: Small claims limits vary by state ($2,500–$25,000). Australia: VCAT, NCAT, or equivalent state tribunal. Alternatively, engage a commercial debt collection agency, which typically charges 15–25% of the recovered amount.

Late fees serve two purposes: they compensate you for the cost of extended credit, and they create a financial incentive for clients to pay on time. However, they must be handled correctly to be enforceable.

How to set a late-fee rate

• Percentage per month: 1.5%–2% per month is the most common commercial rate. At 1.5%/month, a £5,000 invoice overdue by 60 days accrues £150 in fees — enough to motivate payment without being punitive.
• Flat fee: Some businesses prefer a fixed late-payment fee (e.g., £50 per invoice past due). Simpler to administer, but less proportionate for large invoices.
• Annual rate: Expressing the rate annually (e.g., 18% per annum) sounds more formal and is legally clearer than a monthly rate in some jurisdictions.

The enforceability rule

Contractual late fees are only enforceable if:

1. They were communicated before work began (in your contract or terms of service).
2. They appear on the invoice itself.
3. The rate is not so high as to be a “penalty clause” under contract law — courts in many jurisdictions will not enforce punitive rates.

In the UK, even without any contractual agreement, you are entitled to statutory interest under the Late Payment Act — currently 8% above the Bank of England base rate. You can claim this automatically; no prior notice to the client is required.

Tracking which invoices are overdue — and by exactly how many days — is essential before you can apply late fees accurately. InvoiceGrid surfaces this automatically, so you always know the exact number of days past due for every outstanding invoice.

For a complete follow-up workflow, read: overdue invoice letter templates and how to write airtight payment terms in your contract.