Payment terms: the number that decides when you actually get paid

Payment terms look like a detail and behave like a financing decision. Thirty days against sixty on the same revenue is a month of working capital you either have or borrow, and for a small company that difference is often larger than the margin on the work itself. The terms are also one of the few commercial levers that cost the customer very little to concede and nobody thinks to ask about.

What payment terms actually specify

• The period — net 14, net 30, net 60 — and whether it runs from the invoice date or from month end, which can add thirty days without changing the headline number.
• When the clock starts: invoice date, delivery, acceptance, or receipt of a correct invoice. The last one is where disputes live.
• Early settlement discounts, if any, and whether they are worth the margin.
• Interest and recovery costs on late payment, which many jurisdictions grant by statute whether or not the contract mentions them.
• What suspends the clock — a disputed line, a missing purchase order number, a wrong address.
• Payment method, because a method that takes five days to clear changes the effective term.

The clause that matters most

Not the number of days, but what counts as a correctly submitted invoice. Large customers routinely reset the clock when an invoice lacks a purchase order number, a cost centre or a specific attachment — and they are entitled to, because the terms said so. Half the invoices paid "late" were never validly submitted in the first place, which is an administrative problem dressed as a collections problem and is fixed by getting the submission requirements in writing at the start.

Agree terms before the work, not on the invoice. Terms printed on an invoice the customer never agreed to are not the terms of the contract, and discovering that during a dispute is an expensive way to learn it.

Negotiating them

1. Ask for shorter terms explicitly — many buyers have a standard and some discretion, and nobody volunteers the discretion.
2. Offer something for it: a deposit structure, a staged schedule, or a small discount for faster settlement.
3. Trade terms against price rather than treating them as a separate conversation; they are the same money.
4. Put milestone payments on anything long, so one dispute does not hold the whole value.
5. Know your own cost of waiting before agreeing — if sixty days means borrowing, that cost belongs in the price.

When they are ignored

Terms with no consequence are a suggestion. Interest you never charge teaches customers your deadline is soft, and the companies that get paid on time are rarely the ones with the harshest terms — they are the ones whose invoices are correct, whose reminders are predictable, and who follow up on the first day of lateness rather than the thirtieth. The terms set the expectation; the routine after the due date is what collects.

Ettex Invoices carries the agreed terms onto every invoice with the due date calculated from the right trigger, and the reminder schedule follows from it rather than from somebody remembering. Where lateness is persistent, the pattern shows up first in days sales outstanding rather than in any single overdue invoice.