Payment Terms
Payment TermsThe conditions under which a seller expects payment from a buyer.
Detailed Explanation
Payment terms outline when payment is due, what payment methods are accepted, what happens if payment is late, and any early payment incentives. Common elements include due date (Net 30, Due on Receipt), late fees, early payment discounts, and accepted payment methods. Clear payment terms set expectations, help manage cash flow, and reduce payment disputes. Terms should be agreed upon before work begins and clearly stated on every invoice.
Examples
- Payment terms: Net 30, 2% late fee after 30 days
- Standard payment terms: Due on receipt, payment via ACH or check