Payment terms are not boilerplate. They are a miniature financial contract appended to every invoice. The choices you make in drafting them have direct, computable effects on your business's cash conversion cycle.
The Net Days Clause
A "Net 30" term means the invoice is due within 30 calendar days. Always specify: "Payment is due within 30 calendar days of the invoice date."
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The Late Payment Clause
A late fee clause must clear three tests: prior disclosure, reasonableness, and usury compliance. It is the core mechanism for protecting your cash flow.
Deposit Structures
A deposit is a risk-transfer mechanism. It aligns the client's financial commitment with your labor commitment, effectively acting as skin-in-the-game pricing.
Legal Disclaimer
This article is for informational purposes only. It is not legal or tax advice. Statutory rates vary by jurisdiction; always verify with counsel before drafting binding terms. See our disclaimer.