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What are invoice payment terms?

When designing your process for invoicing and billing customers, you’ll probably want to templatize invoices for scale. You may also need some customization for different types of products, services, and offerings to your customers. And depending on billing contracts and terms that they agree to, you’ll want payment expectations to be clear on your invoices.

With that in mind, here is a list of commonly used abbreviations, acronyms, and terms you could use to set clear expectations for a customer who receives an invoice. There’s no right or wrong when it comes to invoice payment terms. It all depends on your business’s needs and what works best for you and your customers. Here’s a few common payment terms to help you assess what’s best for your business.

Care of The person who needs to receive the invoice
Upon receipt Due when invoice is received
Due on receipt Invoice is paid at a set time when invoice is received
CWO Cash with order
COD Cash on delivery
EOM End of Month
30 Days EOM Due at the end of the month following the month of the invoice.
60 Days EOM Due at the end of the second month after the month of the invoice.
Net (Number) The net amount is due the (number) of days after the date of the invoice.
FOC Free of charge

Additional notes on invoicing acronymsNew call-to-action

Upon receipt

“Upon receipt” is a payment term that means the buyer should pay the seller as soon as they receive the invoice. This term is often used when the seller is providing a service or shipping goods that are time-sensitive.

For example, if you hire a catering company to provide food for an event, you will likely be asked to pay “upon receipt” of the invoice. This ensures that the catering company will be paid in a timely manner so that they can cover the cost of the food and staff. In general, “upon receipt” is a good payment term to use when you want to ensure that the seller is paid quickly.

Care of

Use the term “care of” on an invoice to have it delivered to the person or team that can actually pay it. Use the person who signed the contract or the primary point of contact in the relationship. It’s a good idea to minimize the number of times an invoice changes hands within your customer’s organization. They’ll appreciate the efficiency, and you’ll increase your chances of being paid on time.

If you’re mailing an invoice, use “care of” the intended recipient in addition to the address. You can also include it in the subject line of an email to accounts payable, and cc the intended recipient.


In the case of “cash with order,” the customer pays the vendor at the time they place the order (in advance of receiving the product). CWO buyers will normally agree that there is no ability to receive a refund upon delivery of the product. Sometimes, a CWO requires part of the payment up front, and then the rest upon delivery of the product or service.

CWOs are common when buying high-ticket items, such as a car or a house, as the seller wants to ensure that they receive the full amount of payment before they provide the product or service. CWOs are also common when dealing with international buyers, as it can be difficult to collect payment after the product or service has been delivered.


“Cash on delivery,” also referred to as “collect on delivery,” COD is a transaction where the customer pays for the product or service at the time of delivery rather than using credit. This can be a cash flow advantage to the buyer because they have some extra time to save. It’s also advantageous to the seller, who knows the payment will be received once the product is delivered.

COD is common for transactions involving physical goods, but can also work for services. COD can be an advantageous payment method for both buyers and sellers because it offers a degree of security for both parties.


Pretty simple. EOM on an invoice means the payment is due at the end of the month. 30 or 60 days EOM means the payment is due 30 or 60 days from the end of the month.

This is a common payment method because  it gives the buyer a little bit of leeway in terms of when they need to pay the invoice. It also gives the seller a chance to receive payment sooner rather than later.

Net XX

Net 30, Net 60, etc. means that the buyer has that number of days to pay the invoice after receiving it. So, if an invoice says “Net 30,” that means the buyer has 30 days to pay the invoice after receiving it.

This is a common payment method because it gives the buyer some time to receive the product or service and make sure it meets their expectations before they have to pay. It also allows the buyer to spread out their payments over a period of time, which can be helpful for businesses with tight cash flow.


Use a “free of charge” invoice even if you’ve provided a product or service to a customer for free. This will provide both parties with documentation of the product or service delivered, which might be a reminder of the strength of the relationship later on.

It’s important to be aware of the different invoice payment terms and what they mean for your business. It will help you promote positive relationships with customers. It will also help ensure cash flow remains consistent and healthy. Check out our invoicing for small businesses for best practices, templates, and collections strategies.