What does Net 30 mean on an invoice?

Net 30 means the full balance is due within 30 days of the invoice date. Net 7 and Net 14 work the same way with 7- and 14-day windows. The shorter the term, the faster you get paid.

What payment terms should a contractor use?

For most trade work, short terms — Net 7 or Net 14 — plus a deposit on larger jobs. Net 30 mainly suits commercial clients who require it; for residential jobs it just delays your cash for no benefit.

Can a contractor charge a late fee?

Yes, if the fee is stated in your invoice or contract terms before the work and stays within your state's legal maximum. A monthly finance charge of 1%–1.5% is common. Confirm the cap where you operate.

Should I take a deposit before starting a job?

On any job with real material cost or a multi-day timeline, yes. A deposit covers your up-front outlay and signals a serious customer. Many trades take 25–50% down with the balance due on completion.

Contractor Payment Terms Explained: Net 7 vs. Net 14 vs. Net 30

Two contractors can do the exact same work for the exact same price and end up in completely different financial shape — because one gets paid in 5 days and the other in 45. Your payment terms quietly decide your cash flow. Here’s how they work and how to set them so the money shows up sooner.

What “Net” terms actually mean

“Net” terms state how long the customer has to pay the full balance from the invoice date:

Net 7 — due within 7 days.
Net 14 — due within 14 days.
Net 30 — due within 30 days.

That’s it. The number is just the size of the window. And the window is a choice you make, not a law of nature — many trades default to Net 30 simply because they saw it on someone else’s invoice.

Which terms should a trade business use?

For most residential trade work, shorter is better:

Net 7 or Net 14 for typical jobs. The work is done, the customer’s happy, and there’s no reason to finance them for a month.
Net 30 mainly when a commercial client requires it. Big property managers and GCs often pay on 30-day cycles, and that’s the cost of the work — just price it knowing the cash is slower.
Due on receipt / on completion for small jobs you can collect on site.

The longer the term, the longer your money is in someone else’s bank account instead of yours. Default to the shortest term the customer will accept.

Take a deposit on bigger jobs

Terms cover the balance; deposits cover your risk. On any job with real material cost or a multi-day timeline, collect money up front:

It covers the materials you buy before you’ve earned a dollar.
It filters out tire-kickers — serious customers pay a deposit without blinking.
It protects you if the job stalls or the customer ghosts.

Many trades take 25–50% down, with the balance due on completion. Roofing, painting, and remodeling jobs almost always should.

Where late fees fit in

A late fee is a backstop, not a strategy. It’s legitimate if it’s in your agreed terms before the work starts and stays within your state’s legal maximum — commonly a 1%–1.5% monthly finance charge on the overdue balance.

If you need to apply one, the late fee calculator works out the fee and the new total to put on the reminder. But understand what a late fee really is: evidence that your other systems (short terms, deposits, fast invoicing, follow-up) didn’t collect on time. Fix those and you’ll rarely reach for the fee.

The real fix: get paid before it’s ever late

Payment terms manage when money is due. The faster lever is collecting at the moment the customer is most willing to pay — the second the job is done.

Invoice on site, same day. Don’t “send it tonight.” Enthusiasm (and willingness to pay) peaks the moment you finish. Our free invoice generator gets a clean invoice out in seconds.
Take a card on the spot or send a pay link before you leave.
Keep a card on file for repeat customers so recurring work bills itself.
Automate follow-up on anything unpaid — most late payments are forgotten, not refused, and a polite automatic nudge collects the bulk of them.

Putting it together

Set short terms (Net 7–14), take deposits on big jobs, keep late fees in your written terms as a backstop, and — above all — invoice the moment the work is done. Do that and “getting paid” stops being the stressful part of the business. See how JobStack automates the invoicing and follow-up for your trade.