Net 7 vs Net 14 vs Net 30: Which Should I Choose?

What each term means

"Net" simply means the full amount is due within that many days of the invoice date, with no early-payment discount baked into the figure. Net 7 gives the customer a week, net 14 a fortnight, and net 30 a calendar month. The clock normally starts on the invoice date unless your terms say otherwise, so net 14 on an invoice dated 1 July is due on 15 July.

None of these is a legal default in Australia — you choose the term, state it, and the customer agrees to it before you trade. If you never state a term at all, you are relying on a court's view of what would have been reasonable in the circumstances, which is far weaker and far less predictable than a written agreement. The lesson is to pick a term on purpose and put it in writing, rather than letting it be assumed.

The cash-flow trade-off

Each extra day of terms is a day you fund the customer's purchase yourself, out of your own working capital. On a $10,000 invoice, the difference between net 7 and net 30 is 23 days of cash tied up — money you cannot use for wages, stock or paying your own suppliers in the meantime. Multiply that across every open invoice and the choice of term has a real effect on how much cash your business needs to keep on hand.

Net 7

Best for cash flow; suits small jobs and untested customers where you want your money back quickly.

Net 14

Balanced; the practical default for most service businesses, and the term most clients accept without comment.

Net 30

Slowest; reserve it for large, reliable accounts you can genuinely afford to fund for a month.

Match the term to the customer

Think about risk and relationship, not just your own preference. A new customer you have never traded with should sit on net 7, or pay a deposit, until they have proven they pay reliably. A long-standing client who always pays on the dot can comfortably hold net 30, because the risk that they fail to pay is low and the goodwill is worth something.

Large corporates and government buyers often expect net 30 as their standard, and many will not change it for a smaller supplier. If you want to win that work, the usual move is to accept the term but build the cost of 30-day credit into your pricing, rather than refusing it outright and losing the job. Our guide to offering 30-day terms covers exactly when that trade is worth making.

Make your choice unmistakable

Whichever term you pick, state it plainly on the invoice: "Payment: net 14 — due 14 days from invoice date." Then add the actual calendar due date as well, such as "Due: 15 July 2026", so there is no arithmetic for the customer to get wrong and no room for a convenient misreading.

Avoid quietly mixing terms across invoices to the same customer — if one invoice says net 14 and the next says net 30 without explanation, you invite confusion and disputes about which applies. Set the term once in your terms of trade, repeat it the same way on every invoice, and you remove one of the most common excuses for late payment: genuine uncertainty about when the money was actually due.