Due date and payment terms

Also called Net 30, Payment terms, Credit terms

When you have agreed to be paid. Negotiable far more often than most small businesses attempt.

What it means

Payment terms set when payment falls due: on completion, within 14 days, within 30 days of invoice, or 30 days from end of month, which is materially longer than it sounds.

"Net 30" means thirty days from the invoice date.

Why it matters

Terms are the largest single lever on cash flow available to a small business, and the one most often accepted without discussion.

Moving from 60-day to 30-day terms halves the working capital a growing business needs, permanently.

What it looks like in practice

Ask. A great many customers will accept shorter terms, a deposit or stage payments if asked at the point of agreement rather than after the work has started.

Put terms on the quote, the order acknowledgement and the invoice. Terms that only appear on the invoice may not be part of the contract at all.

Statutory interest applies to late payment of commercial debts and is a right you do not have to negotiate for.

What to watch out for

"End of month following" terms, which can be nearly sixty days for an invoice raised early in a month.

Payment on a customer's own payment run, which effectively lengthens whatever was agreed.

Retentions in construction, held sometimes for a year or more after completion.

Where to get proper advice

GOV.UK on statutory late payment interest. Large businesses must report their payment performance publicly, and that data is searchable before you sign.