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Starting and Growing a Career in Web Design
The problem with unclear payment terms
When I started my first business, I thought sending an invoice was enough to get paid. I'd complete the work, send a bill, and then... wait. And wait. And sometimes wait some more.
What I didn't realize was that without clear payment terms, I was essentially letting my clients decide when they wanted to pay me. Some were prompt, others took their time, and my cash flow suffered as a result.
If you've ever found yourself wondering when exactly you'll get paid for work you've already completed, you're not alone. Let's fix that.
What are invoice payment terms?
Payment terms are the conditions that dictate when and how your clients are expected to pay you. They answer critical questions like:
How long does the client have to pay the invoice?
Are there incentives for paying early?
Are there penalties for paying late?
What payment methods are accepted?
Well-defined payment terms set clear expectations, reduce confusion, and help you get paid faster.
Common payment terms explained
Here's a simple breakdown of terms you might use:
Due Upon Receipt: Payment expected immediately (though many clients interpret this as "whenever", so it’s usually better to be specific)
Net 7, Net 15, Net 30: Payment due 7, 15, or 30 days after the invoice date
2/10 Net 30: 2% discount if paid within 10 days, otherwise full payment due in 30 days
50% upfront (or down payment): Half paid before work begins, half upon completion
End of Month (EOM): Payment due at the end of the month in which the invoice was issued
Cash on Delivery (COD): Payment required when goods or services are delivered
How to choose the right payment terms for your business
The best payment terms for your business should balance your cash flow needs with market norms and client relationships. Consider these factors:
Your cash flow requirements: If you have regular expenses like payroll, shorter terms may be necessary
Industry standards: What terms are common in your field?
Client relationships: Long-term clients might expect different terms than new ones
Project size: Larger projects might warrant milestone payments rather than payment upon completion
Competitive advantage: Could better terms help you win business?
Read more - “7 Ways to Encourage Early Payments from Clients (Without Annoying Them)” →
How to communicate your payment terms effectively
Clear communication is essential for payment terms to work. Mention them:
During initial discussions with new clients
In your proposals and contracts (prominently, not buried in fine print)
On your invoices (with specific due dates, not just "Net 30")
In follow-up communications before the due date
Use plain language that leaves no room for misinterpretation. Instead of "Net 15," try "Payment due within 15 days of invoice date. Due date: [specific date]."
The psychology of payment terms
How you frame your payment terms can significantly impact when you get paid:
Positive reinforcement: Early payment discounts often work better than late payment penalties
Specificity: A concrete date ("Due by February 15") works better than a relative timeframe ("Due in 30 days")
Courtesy: Studies show that invoices with "please" and "thank you" get paid faster
Ownership: Terms that you've jointly agreed upon with clients are more likely to be respected
Read more - “Payment Psychology: Why Some Clients Always Pay Late (And How to Change It)” →
How to make your payment terms work harder
Beyond just setting terms, here are ways to optimize them:
Offer multiple payment options: Make it as easy as possible for clients to pay you
Consider early payment incentives: A small discount for prompt payment can dramatically improve cash flow
Automate reminder emails: Send friendly nudges a few days before payment is due
Review regularly: Analyze which terms are working and which aren't, then adjust accordingly
How Cheque can help
With Cheque, setting and enforcing payment terms becomes effortless:
Design flexible terms that work for both you and your clients
Offer automated early payment incentives that get you paid faster
Send professional invoices with clear due dates
Get visibility into when payments are likely to arrive
Reduce the time spent on payment admin and follow-ups
Your payment terms aren't just administrative details, they're a crucial part of your business strategy. By setting clear, consistent terms and communicating them effectively, you can significantly improve your cash flow and reduce the stress of uncertain payment timelines.
Ready to get paid on your terms? Let's talk about how Cheque can help.