Net terms and late fees on US invoices
What net 30 means, how to state a late fee on the invoice, and why state law limits what you can charge.
Payment terms tell the customer when an invoice is due. Net 30 means the full amount is due 30 days after the invoice date. Net 15, net 45, and net 60 work the same way. Terms such as 2/10 net 30 add an early-payment discount. In the United States, late fees and interest come mainly from your contract and from state law, not from a federal rule for private invoices. A late fee is easiest to enforce when the customer agreed to it in advance, in a signed contract, quote, or order, and it appears on the invoice. States can limit the interest a seller may charge, so ask a lawyer or your accountant before you set a rate. 4invoices does not add late fees or send reminders automatically.
- Net 30 means payment is due 30 days after the invoice date.
- Agree late fees in advance in the contract or quote, and repeat them on the invoice.
- State law limits interest and can limit fees; check yours.
- State the due date as a date, not only as a number of days.
How it works
Agree the terms before the work. Put net terms and any late fee in the contract, quote, or order.
Show the terms on every invoice. Print the invoice date, the due date, and the terms so there is no doubt about when payment is due.
Keep the late fee lawful and clear. State whether it is a flat fee or a percentage, and how often it applies. Have a lawyer or accountant check it against your state's rules.
Follow up in writing. When an invoice passes its due date, send a polite reminder that quotes the invoice number, the amount, and the agreed terms.
Record payments and any fee on a later invoice. Do not change a sent invoice. Issue a new invoice or a credit memo so that your numbering and records stay consistent.
Legal references
- Contract terms between seller and customer — the primary source for net terms and late fees.
- State law on interest, usury, and late charges — varies by state; check your state's rules.
- Uniform Commercial Code (UCC) Article 2 — general rules for the sale of goods, adopted by states in varying forms.
Frequently asked questions
What does net 30 mean?
The customer must pay the full amount within 30 days of the invoice date. Count from the invoice date unless your contract says otherwise.
Can I charge a late fee if I did not mention it beforehand?
It is risky. A fee is much easier to enforce if the customer agreed to it in advance. Ask a lawyer about your situation.
What is a credit memo?
It is a document that reduces the amount a customer owes, for example after a return or a pricing error. Issue it rather than editing an invoice you already sent, and refer to the original invoice number.
Does 4invoices apply late fees or send payment reminders?
No. 4invoices creates invoices with a tax rate per line, any currency with an exchange rate, and a PDF download. It does not calculate or add late fees, send reminders, or collect payments. Write your terms on the invoice and follow up yourself.