The most common terms for trade and service businesses are Net 15 and Net 30. Net 15 means the client has 15 days to pay from the invoice date. Net 30 gives them 30 days. Both are widely accepted, but which one makes sense for you depends on your situation.

If you’re a smaller operation where cash flow is tight and you’re covering materials, fuel, and labor out of pocket, Net 15 or even Due on Receipt is reasonable. You did the work. You shouldn’t have to wait a month to get paid for it. Residential customers in particular are used to paying quickly, and most won’t push back on shorter terms.

Commercial clients and general contractors are a different story. Larger companies often operate on Net 30 or even Net 45 internally, and pushing for faster terms might not be realistic. That said, you should still put your preferred terms on the invoice. If a GC has their own payment schedule, you’ll negotiate that separately, but starting with Net 30 keeps the expectation clear on your end.

For bigger jobs, don’t rely on a single invoice at the end. Require a deposit before starting work (25% to 50% is common in the trades) and bill in stages as the project progresses. This protects your cash flow and limits your risk if the client disappears or disputes the final bill. Progress billing is standard in construction and most clients expect it.

Adding a late payment fee to your terms is worth doing. Something like 1.5% per month on overdue balances gives clients a reason to pay on time. Include the late fee language directly on the invoice so there’s no surprise. Not every state handles late fees the same way, so keep the percentage reasonable and make sure it’s clearly stated upfront.

A few practical things that make a difference. Put the due date in plain language on the invoice, not just “Net 15.” Write “Due by July 20, 2025” so there’s zero ambiguity. Include your accepted payment methods and make it easy to pay. The harder you make it, the longer people wait. If you can accept online payments or credit cards through your invoicing system, you’ll get paid faster than mailing paper invoices and waiting for checks.

Whatever terms you choose, be consistent and follow up. A lot of trade business owners send the invoice and then hope the money shows up. If it’s past due, follow up immediately. Don’t let receivables pile up for weeks without action. As a Long Beach bookkeeper working with contractors and service businesses, the most common problem I see isn’t bad payment terms. It’s not enforcing the terms that are already on the invoice.

Start with Net 15 for residential and smaller jobs, Net 30 for commercial accounts, require deposits on anything over a few thousand dollars, and follow up the day a payment is late. Simple terms that you actually enforce will do more for your cash flow than complicated language that nobody reads.