Payment terms should be agreed before the sale, in the contract or the terms and conditions the customer accepts with its order, and then repeated on every invoice. The due date they set decides when an invoice becomes overdue, when reminders start and when late payment interest can begin.
Net 30 and other common payment terms
Net 30 means the full invoice amount is due within 30 calendar days of the invoice date, weekends included. A UK invoice may say 30 days or 30 days from invoice date instead, and net 7, net 14 or net 90 change only the number of days.
| Term | What it means | Due date for an invoice dated 15 March 2026 |
|---|---|---|
| Net 30 | Full amount within 30 days | 14 April |
| Net 60 | Full amount within 60 days | 14 May |
| Due on receipt | Payment when the invoice arrives | The day it arrives |
| Net 30 EOM | Full amount within 30 days of the month end | 30 April |
| 2/10 net 30 | 2% off within 10 days, otherwise the full amount within 30 | 25 March with the discount, 14 April without |
Terms such as 2/10 net 30 add an early payment discount to the net period. Some customers count from the day they receive or approve an invoice, so print the actual due date next to the terms.
Net 60 and the 60-day limit
Net 60 gives the customer 60 calendar days from the invoice date. For terms between businesses, it is also where UK and EU law draws a line.
- UK. GOV.UK guidance says agreed terms should usually be no longer than 60 days between businesses and 30 days for public authorities. Under section 4 of the Late Payment of Commercial Debts (Interest) Act 1998, if agreed terms run past 60 days and are grossly unfair to the supplier, statutory interest can start once 60 days have passed from delivery or receipt of the invoice, whichever is later.
- EU. Directive 2011/7/EU limits terms between businesses to 60 calendar days unless expressly agreed and not grossly unfair to the creditor, and public authorities to 30 days, or 60 at most. Member states may go further.
- US. Terms between private businesses come from your contract, so state them in it and on every invoice.
The UK Commercial Payments Bill, introduced in May 2026, would cap payment terms between businesses at 60 days with strictly limited exemptions. It had not become law by October 2026.
Example. You sell £730,000 a year to one customer, or £2,000 a day. If it pays on the due date, it owes you about 30 days of sales on net 30, or £60,000, and about 60 days on net 60, or £120,000. At an illustrative borrowing cost of 7% a year, the extra £60,000 costs £60,000 × 7% = £4,200 a year, and your days sales outstanding on this account rises by about 30 days, although the customer still pays on time.
Due on receipt
Due on receipt means the customer should pay as soon as the invoice arrives, with no credit period. It suits one-off jobs, small amounts and new customers you have not checked yet.
In the UK, the 30-day default applies only when no payment date was agreed, so make due on receipt part of the terms the customer accepts before the sale, not just a line on the invoice. If you need the money before you deliver, ask for cash with order instead, because due on receipt still means you deliver first.
EOM payment terms
EOM means end of month, and an EOM term counts from the last day of the month the invoice is dated in. Net 30 EOM, also written as 30 days end of month, makes every invoice dated in March due on 30 April. Plain EOM with no number is read in different ways, so spell out the due date.
EOM terms let the customer pay a month of invoices in one run, but they lengthen the wait. An invoice dated 1 March on net 30 EOM is due after 60 days and one dated 31 March after 30, so on average net 30 EOM works like net 45.
How to set payment terms for your customers
- Agree them in writing first. Put them in the contract or the terms and conditions the customer accepts with its first order.
- Match terms to risk. Give longer terms only after a credit check and with a credit limit in place.
- Start reminders from the due date. A reminder a few days before it and another just after it show customers that you follow your terms.
Sunbay reads each invoice and its due date from your ERP or accounting system and runs the reminder sequence you set around that date. It sends emails and SMS before and after the due date, makes AI voice calls and, at later stages, issues interest notes and demand letters, with every customer reply and promised payment date kept next to the invoice. See how automated reminders and escalations work.
Frequently asked questions
What does net 30 mean?
The full invoice amount is due within 30 calendar days of the invoice date. An invoice dated 15 March 2026 is due on 14 April and overdue from 15 April.
What are standard payment terms in the UK?
There is no single standard. Without an agreed date, payment is late 30 days after the customer receives the invoice or you deliver, whichever is later. Agreed terms should usually be 60 days or less between businesses and 30 days for public authorities.
Can a customer insist on 90-day payment terms?
It can ask, and you can agree. In the UK, statutory interest can still start after day 60 if those terms are grossly unfair to you, and in the EU terms over 60 days must be expressly agreed and not grossly unfair. Work out the cash 90 days would tie up before you sign.
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