Business glossary
Payment terms
The agreed rules for when, how and under what conditions payment is due.
Example
An invoice can state: $800 due October 1, bank transfer accepted, use INV-104 as the payment reference. Any agreed deposit, installment or early-payment discount should be shown clearly.
How it differs from related terms
Payment terms describe when and how to pay; an invoice number identifies what to pay. Agree on terms before supplying work, then repeat the actual deadline and instructions on the invoice.
Frequently asked questions
What is an example of payment terms?
An invoice can state: $800 due October 1, bank transfer accepted, use INV-104 as the payment reference. Any agreed deposit, installment or early-payment discount should be shown clearly.
How should payment terms be interpreted?
Payment terms describe when and how to pay; an invoice number identifies what to pay. Agree on terms before supplying work, then repeat the actual deadline and instructions on the invoice.