Invoicing and payment terms
Payment terms - commonly used invoice payment terms and their meanings
Guide
Your invoice payment terms and conditions can impact the number of days it takes you to get paid. Without them, you aren't communicating when a payment is expected, as well as other conditions like your preferred payment method and any consequences of late payments.
Invoice payment terms
This list explains the payment terms most commonly used on invoices.
| Net monthly account | Payment due on last day of the month following the one in which the invoice is dated |
|---|---|
| Net monthly account PIA | Payment due on last day of the month following the one in which the invoice is dated Payment in advance |
| Net monthly account Net 7 | Payment due on last day of the month following the one in which the invoice is dated Payment seven days after invoice date |
| Net monthly account Net 10 | Payment due on last day of the month following the one in which the invoice is dated Payment ten days after invoice date |
| Net monthly account Net 30 | Payment due on last day of the month following the one in which the invoice is dated Payment 30 days after invoice date |
| Net monthly account Net 60 | Payment due on last day of the month following the one in which the invoice is dated Payment 60 days after invoice date |
| Net monthly account Net 90 | Payment due on last day of the month following the one in which the invoice is dated Payment 90 days after invoice date |
| Net monthly account EOM | Payment due on last day of the month following the one in which the invoice is dated End of month |
| Net monthly account 21 MFI | Payment due on last day of the month following the one in which the invoice is dated 21st of the month following invoice date |
| Net monthly account 1% 10 Net 30 | Payment due on last day of the month following the one in which the invoice is dated 1% discount if payment received within ten days otherwise payment 30 days after invoice date |
| Net monthly account COD | Payment due on last day of the month following the one in which the invoice is dated Cash on delivery |
| Net monthly account Cash account | Payment due on last day of the month following the one in which the invoice is dated Account conducted on a cash basis, no credit |
| Net monthly account Letter of credit | Payment due on last day of the month following the one in which the invoice is dated A documentary credit confirmed by a bank, often used for export |
| Net monthly account Bill of exchange | Payment due on last day of the month following the one in which the invoice is dated A promise to pay at a later date, usually supported by a bank |
| Net monthly account CND | Payment due on last day of the month following the one in which the invoice is dated Cash next delivery |
| Net monthly account CBS | Payment due on last day of the month following the one in which the invoice is dated Cash before shipment |
| Net monthly account CIA | Payment due on last day of the month following the one in which the invoice is dated Cash in advance |
| Net monthly account CWO | Payment due on last day of the month following the one in which the invoice is dated Cash with order |
| Net monthly account 1MD | Payment due on last day of the month following the one in which the invoice is dated Monthly credit payment of a full month's supply |
| Net monthly account 2MD | Payment due on last day of the month following the one in which the invoice is dated As above plus an extra calendar month |
| Net monthly account Contra | Payment due on last day of the month following the one in which the invoice is dated Payment from the customer offset against the value of supplies purchased from the customer |
| Net monthly account Stage payment | Payment due on last day of the month following the one in which the invoice is dated Payment of agreed amounts at stage |
When creating your invoice payment terms, bear in mind that if you have clear, concise and consistent payment terms, it is more likely that your invoice will be paid in time and this will have a positive impact on your business cashflow.
For further information on contract terms and conditions see setting terms and conditions and credit checking your customers and setting credit limits.
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