An invoice should generally be paid within 30 days (Net 30) if no other terms are specified, as this is the common industry standard, though payment terms can range from immediate ("Due on Receipt") to longer periods like 60 or 90 days, depending on the industry, client agreement, and business needs. Always check the invoice for a specific due date or terms like "Net 15," "Net 30," or "Due upon receipt".
A business owner can set their own payment terms when it comes to invoicing. They can choose to offer discounts for early payments and payment upfront. If no agreed-upon payment date has been established, a customer must pay a company within 30 days of receiving an invoice or the goods or service.
Unless you agree a payment date, the customer must pay you within 30 days of getting your invoice or the goods or service. You can use a statutory demand to formally request payment of what you're owed.
Many businesses extend net 30 terms with their invoices, which means you have 30 days to make the payment. Some even give net 60, 90, or even higher terms. This helps with your cash flow and gives you an opportunity to assess the product or service you have purchased before you pay for it.
Common types of invoice payment terms
Net 30, 60 or 90: This means the full payment is due within 30, 60 or 90 days after the invoice date.
Stick within the legal time limit for invoicing.
Although the legal time limits for invoicing are usually forgiving, you should send invoices within 30 days to maintain a steady cash flow.
The standard invoice timeline usually spans 30 days, often referred to as Net 30 terms, but the specific duration can vary based on industry standards, client payment processes, and specific invoice terms.
Under the Limitation Act 1980, invoices can be issued up to six years after the work was completed or the goods were delivered. While there is no legal restriction within this time frame, issuing invoices promptly is always best to avoid disputes or complications.
Some clients genuinely believe they'll have the money “next week.” Others are juggling multiple bills and hoping things magically align. Either way, they're postponing payment, not maliciously, but optimistically (and sometimes irresponsibly).
30+ days late
If your client hasn't made payment (or meaningful contact) within 30 days of the invoice becoming due, it may be time to issue a letter before action (LBA), or to pass over the matter to a debt collection agency. An LBA gives your client formal notice that legal action is imminent.
Across the board, net 30 terms are standard practice in most industries and should be a good fallback if you don't know where you stand. This means that the customer is required to pay within 30 days from receipt of the invoice.
If you have an unpaid invoice, here are some steps you can take to try and resolve the situation:
Many companies consider an ideal average payment period to be around 90 days. A payment period significantly longer than 90 days suggests that the company is taking too long to settle its credit, while a shorter average payment period indicates that the company makes prompt payments to its suppliers.
Invoices must always include the invoice date as well as the due date. Setting a due date encourages the client to pay you within a certain time frame. The general rule is 30 days from the invoice date. However, you can discuss this with your customer and either make it shorter or longer than 30 days.
Here are seven tips for setting up better payment terms for your clients.
If no specific payment deadline has been communicated or agreed upon, most customers are generally expected to pay within 30 days of receiving the invoice or the goods or services provided. This 30-day standard is a common default in many business transactions, but it is not legally fixed.
The "15/3 rule" is a popular, though somewhat debated, credit card strategy suggesting you make two payments in your billing cycle: one about 15 days before the statement closes and another 3 days before, aiming to lower your reported balance and improve credit utilization by keeping your balance low when the issuer reports to credit bureaus. While paying more frequently can help reduce interest and utilization, experts emphasize the key is to monitor your statement closing date, not just the arbitrary 15 and 3-day marks, as credit utilization is reported then.
Not every client is late because of emotional avoidance or cash flow trouble. Some deliberately delay payment as a business strategy. By controlling when they pay you, they assert control over the relationship. It's subtle, but it sends a message: We set the terms.
Federal law says that invoices remain outstanding for up to 6 years; i.e., you can pursue a client for an unpaid invoice even if that invoice is 6 years old. Past that point, you'll probably need to seek legal action if you want to receive your payment.
According to California Code of Civil Procedure § 337(1), the statute of limitations for a written contract is four years. Under § 339(1), the limit for an oral contract is two years.
Business clients (B2B)
For business transactions, the usual term is 30 days. A longer period (up to 60 days) is possible if both parties agree in writing. However, many freelancers choose shorter freelance invoice payment terms, such as 14 or 30 days, to protect their cash flow.
The more common payment terms are net 30 and net 60. Net 30 means that the business owner expects payment within 30 days from the invoice date. Net (number of days) is a credit term that means a business delivered a product or service first in expectation of receiving compensation at the stated date.
How long does an unpaid invoice remain valid for collection? Under the Limitation Act 1980, invoices remain valid for up to six years from the date the customer last acknowledged the debt or made a partial payment.