Deposits and payment terms

Payment terms are decided before the work, not after it, and they are the single biggest lever a freelancer has over cash flow. Chasing is what you do when the terms were wrong.

What “Net 30” actually costs you

Net 30 means payment is due 30 days after the invoice date. In practice it means 30 days after their accounts department processes it, which is not the same day you sent it, and their payment run is probably weekly or fortnightly. Net 30 realistically pays in 35–45 days.

Shorter terms genuinely work. Net 14 is normal for owner-operator work. Due on receiptis normal for small jobs. The reason to write an actual date rather than a term is that “Net 30” asks the reader to do arithmetic, and people do that arithmetic generously.

Deposits

A deposit does two things: it covers what you spend before you are paid, and it filters out clients who were never going to pay. The second is worth more.

Asking is normal. A client who finds a 50% deposit unreasonable for a booked shoot day is telling you something useful about how the final invoice will go.

Late fees: mostly a signal

The usual line is 1.5–2% per month on overdue accounts. It is rarely collected and it is still worth having, because it moves your invoice up the pile when someone is choosing what to pay this week.

Two conditions for it to mean anything: it has to be agreed before the work — on the quote or in the booking email, not first appearing on a chase — and it has to be on the invoice itself. A fee invented at day 45 is not a term, it is a threat.

Early payment discounts

“2/10 net 30” means 2% off if paid within 10 days, otherwise the full amount at 30. Larger companies with cash often take it, and it can be cheaper than the alternative: 2% to be paid in 10 days is roughly a 36% annualised rate, which sounds appalling until you compare it to invoice factoring or a line of credit at 60 days.

Run that maths for your own situation. For many freelancers it is not worth it.

Retainers

The most stable arrangement available, and the one most people ask for too late. A retainer is a fixed monthly amount for an agreed scope, invoiced in advance.

Two things to write down: what happens to unused hours (they usually do not roll over, and saying so prevents an awkward conversation in month four), and the notice period on either side — 30 days is standard and protects you as much as them.

Putting it on the document

An invoice carrying its own terms is one nobody has to look anything up for:

• The due date, as a date
• What was already paid, if a deposit was taken, and the balance owing
• The late-fee line, if you have one
• How to pay — a link beats an account number

The one that matters most

Agree it in writing before you start. Not a contract necessarily — an email saying what you will do, for how much, with a deposit of X, payable within 14 days of delivery, is enough to be relied on and takes two minutes.

Almost every payment dispute is really a memory dispute, and the person with it in writing wins.

The Bindery invoice generator has fields for terms, deposits and a payment button, and remembers them so the next invoice carries the same ones without retyping.