Payment terms are written in a compact notation that assumes everyone reads it the same way. They don't, and two terms that look almost identical can differ by weeks.
The notation
Net 30. Payment due 30 days from the invoice date. The default assumption, and the one most often stated without being agreed.
Net 30 EOM. 30 days from the end of the month in which the invoice was dated. An invoice dated the 2nd is due at the end of the following month — nearly 60 days. One dated the 30th is due at the same time, at about 31 days.
30 days from statement. Due 30 days after the monthly statement, not after the invoice. Effectively EOM by another name, common with trade suppliers.
Due on receipt. No credit. Reasonable for a first order or a poor payment history, and worth negotiating away once established.
COD / proforma. Payment before or on delivery. Not credit terms at all.
2/10 net 30. Full amount at 30 days, 2% off if paid within 10 — whether that's worth taking depends on what the cash is otherwise doing.
| Terms | Invoice dated 2 March | Invoice dated 30 March |
|---|---|---|
| Net 30 | 1 April | 29 April |
| Net 30 EOM | 30 April | 30 April |
| 30 days from statement | 30 April | 30 April |
| Net 60 | 1 May | 29 May |
Two invoices dated 28 days apart falling due on the same day is not an error — it is what EOM means, and it is why the average credit period under EOM terms is considerably longer than the number in the notation suggests.
The date the clock starts from
More disputes come from this than from the length of the term.
Invoice date is the usual basis and the easiest to administer.
Delivery date is more favourable to you where a supplier invoices ahead of despatch.
Receipt of invoice is the fairest basis and the hardest to evidence. If a supplier dates an invoice the 1st and emails it on the 20th, terms running from the invoice date have consumed two-thirds of your credit before you saw the document. Worth pushing for where a supplier is habitually slow to send.
Acceptance — after inspection or sign-off — appears in construction and project work. It shifts the risk substantially and needs a defined acceptance step, or it becomes an open-ended term.
Whichever applies, it should be stated on the invoice — it is one of the particulars worth checking on arrival. "Payment terms: 30 days" without saying 30 days from what is an invitation to disagree later.
The legal backstop in the UK
Where nothing is agreed, statute fills the gap. Late payment legislation implies a default period for business-to-business transactions and gives suppliers a right to statutory interest and a fixed sum for recovery costs on overdue commercial debts.
Two things worth knowing:
Silence does not mean no terms. A supplier who never agreed terms with you is not therefore owed nothing until you get round to it.
Grossly unfair terms can be challenged. Very long payment periods imposed on a smaller supplier are not automatically enforceable simply because they were written down.
Check the current thresholds, default periods and interest rate rather than relying on this page — the rates move with base rate and the rules have been amended more than once. If a supplier raises statutory interest, get advice on the specific claim.
Negotiating them
Longer terms are not free. A supplier who agrees to 60 days will generally price it in. Sometimes visibly, more often not.
Reliability is worth more than length. Many suppliers will offer better terms or a discount to a customer who pays predictably. That is a stronger position than one who pays late on longer terms, and it is available to any business whose process is in order.
Ask for the start date, not just the length. Moving from invoice date to receipt of invoice can be worth more than adding a week, and it is usually an easier ask.
Watch the small suppliers. Extending terms with a supplier who cannot absorb it moves your working capital problem onto someone less able to carry it, and it is a good way to lose a supplier you depend on.
Recording them properly
Terms belong on the supplier record, not in someone's memory.
- Set them per supplier in your accounting system, so due dates are calculated rather than estimated
- Record the basis as well as the number, since EOM and net are different fields of behaviour
- Review anything still on default terms — those are the ones nobody has ever agreed
- Check the terms on the invoice against the supplier record when they differ, because suppliers change terms unilaterally more often than you would expect
That last one is the practical control. A supplier quietly moving from 30 days to 14 shows up first as an unexplained payment reminder, and only later as somebody noticing the invoice footer changed.
Cribble reads the dates and terms printed on an invoice rather than assuming your standing arrangement, and flags fields it is unsure about instead of filling them in silently. A due date that doesn't match the supplier record is exactly the sort of quiet change worth seeing before it becomes a reminder letter.