Payment terms (net-30 and more)

The word net means the full invoice amount, and the number is the count of days the customer has to pay it. Net-30 means payment is due 30 days after the invoice date; net-15 means 15 days; net-60 means 60. Due-on-receipt means exactly that — payment is expected as soon as the customer gets the invoice.

Terms can do more than set a deadline. An early-payment discount is often written as something like 2/10 net-30, which means the customer can take a 2% discount if they pay within 10 days, otherwise the full amount is due in 30. It is a small carrot to pull your cash in faster.

Terms can also pull cash forward to before the work. A deposit (a payment due up front to secure the job or buy materials) and progress payments (amounts billed as the work hits milestones) are both payment-term choices that keep you from financing the whole project out of your own pocket.

For trade and construction work, the long net terms common in office vendor relationships are usually a trap. Net-30 means you front the labor and materials and wait a month after billing to be made whole. On a material-heavy job, that can mean carrying thousands of dollars of someone else's project on your own line of credit.

The cash-flow-friendly pattern is to collect money on the way through the job, not after it. A deposit up front, progress payments tied to milestones, and short terms (due-on-receipt or net-15) on the final invoice keep your out-of-pocket exposure small at every stage. For larger or longer jobs, a draw schedule formalizes this so both sides know what triggers each payment.

Whatever you choose, write the terms into the contract and onto every invoice, including any late fee. Vague or unstated terms are the single most common reason contractors end up chasing money 60 and 90 days out.

A deposit is a front-loaded term: a slice of the price collected before work starts, often sized to cover materials so you are not buying the customer's supplies on credit. It also confirms the customer is serious before you block out the calendar.

Progress payments spread the rest across the job. On bigger projects these are organized as a schedule of values and billed through progress billing, sometimes with a portion held back as retainage until the job is accepted. The principle is the same as a deposit: get paid for value as you deliver it rather than all at the end.

Simple Contractor CRM supports deposits, progress draws, retainage, and change orders today, and records payments against the invoice so you can see your accounts-receivable position. Online card payments are planned at launch, and accounting integrations like QuickBooks are on the roadmap.