FREELANCE PAYMENT TERMS GUIDE Complete Reference for Structuring Payment Terms That Protect Your Business By SoloStack — solostack.madethis.app =============================================================================== PART 1: PAYMENT TERMS EXPLAINED =============================================================================== Understanding Net Terms and When to Use Each NET-7 (Payment due within 7 days) --------------------------------- Best for: Small projects under $500, repeat clients with strong payment history, digital deliverables, rush projects Pros: Fast cash flow, minimal exposure if client doesn't pay Cons: Some larger companies can't process invoices this quickly When to use: Short-turnaround projects, trusted clients, deliverables sent digitally NET-15 (Payment due within 15 days) ------------------------------------ Best for: Mid-size projects ($500-$5k), established client relationships, projects with clear deliverable dates Pros: Fast enough to maintain cash flow, reasonable for most business clients Cons: Some corporate clients may push back; their AP process may run Net-30+ When to use: YOUR DEFAULT TERM. Net-15 beats Net-30 for freelancers -- always. It's professional, reasonable, and keeps money moving. NET-30 (Payment due within 30 days) ------------------------------------- Best for: Large corporate clients, ongoing retainers, large projects ($5k+) Pros: Widely accepted by corporate finance departments Cons: 30 days is a long time to wait -- cash flow suffers, especially on multiple projects When to use: Only when the client explicitly requires it AND the project size justifies the wait. Never accept Net-30 as your default when Net-15 would work. NET-45 / NET-60 (Payment due within 45-60 days) ------------------------------------------------- Best for: Large enterprises, government clients (if required) Pros: Acceptable to large procurement departments Cons: Very slow cash flow; you're essentially lending the client money interest-free When to use: Only for contracts over $10k with large, creditworthy companies. Always charge a premium (10-15%) to offset the wait. DUE ON RECEIPT (Payment due immediately upon invoice) ------------------------------------------------------ Best for: Rush projects, new clients, small quick-turnaround work Pros: Fastest possible payment Cons: Clients often ignore "due on receipt" because there's no actual date to target. It can create awkward follow-ups -- "you got it, didn't you?" When to use: New clients ONLY with a 50% deposit already collected. Or rush projects where the client agreed verbally to pay immediately. Always follow up within 24 hours of sending. PRO TIP: Whatever terms you choose, always state them explicitly on the invoice as a specific date: "Payment due: [Month Day, Year]" -- not just "Net-15." Clients respond to dates, not terms. PART 2: THE 5 CLAUSES EVERY FREELANCER NEEDS IN THEIR CONTRACT =============================================================================== Add these clauses verbatim (or adapted to your situation) to every client contract. --- CLAUSE 1: LATE PAYMENT FEE --------------------------- "Invoices unpaid after the due date will be subject to a late payment fee of 1.5% per month (18% per year) on the outstanding balance, OR a flat fee of $25 per month, whichever is greater. [YOUR NAME / BUSINESS NAME] reserves the right to suspend all work on active or future projects until overdue invoices are paid in full." Why this works: Pre-agreed late fees get paid. Surprise fees create arguments. Always include this in your contract before you start work -- you cannot retroactively add a late fee. --- CLAUSE 2: DEPOSIT REQUIREMENT ------------------------------- "A non-refundable deposit of 50% of the total project fee is required before work commences. The remaining 50% balance is due upon completion and delivery of final deliverables. Work will not begin until the deposit invoice is paid." Why this works: The deposit filters out non-serious clients, covers your time if the project is canceled, and ensures you're never working entirely on speculation. --- CLAUSE 3: KILL FEE ------------------- "If the client cancels this project after work has commenced, a kill fee of 25% of the remaining balance (on top of any deposit already paid) will be charged. This compensates for time allocated, work completed, and opportunity cost of turning away other clients." Why this works: Without a kill fee, clients can cancel with no consequences after you've turned away other work. The kill fee is standard practice -- most professional clients expect it. --- CLAUSE 4: RUSH FEE ------------------- "Projects requiring turnaround within 48 hours of briefing will be subject to a rush fee of 25-50% of the standard project rate. Rush fees apply regardless of project size and are non-negotiable. [YOUR NAME] will confirm rush availability before accepting rush projects." Why this works: Rush work disrupts your schedule and often requires working outside normal hours. Charging for it is reasonable and professional. --- CLAUSE 5: WORK STOPPAGE ------------------------- "[YOUR NAME / BUSINESS NAME] reserves the right to pause or stop all work on any project where invoices are more than [7 / 14] days overdue. Work will resume within 2 business days of full payment of all outstanding invoices. [YOUR NAME] is not liable for missed deadlines caused by client non-payment." Why this works: This clause gives you leverage without threatening legal action. It protects you from being held responsible for delays caused by the client's own failure to pay. PART 3: INVOICE PAYMENT INSTRUCTIONS TEMPLATE =============================================================================== Include this section in every invoice you send. Copy and customize. --- PAYMENT INSTRUCTIONS Invoice #: [NUMBER] Invoice Date: [DATE] Due Date: [DATE -- write out the full date, e.g. "July 15, 2026"] Amount Due: $[AMOUNT] Preferred Payment Method: [CHOOSE ONE AND FILL IN] BANK TRANSFER (ACH): Bank: [Your Bank Name] Account Name: [Your Name or Business Name] Routing Number: [XXXXXXXXX] Account Number: [XXXXXXXXXX] Reference: Invoice #[NUMBER] PAYPAL: Send to: [your@email.com] Mark as: "Goods and Services" (not friends/family) Reference: Invoice #[NUMBER] STRIPE / PAYMENT LINK: Click here to pay online: [YOUR STRIPE PAYMENT LINK] WISE (for international clients): Wise Account: [your@email.com or Wise link] Please include the invoice number in the payment reference so I can match the payment to your account. Questions about this invoice? Contact: [YOUR EMAIL / PHONE] Late payments are subject to a 1.5%/month fee per our contract dated [DATE]. --- PART 4: PAYMENT METHODS COMPARISON =============================================================================== BANK TRANSFER (ACH/Wire) Fee: Free (ACH) or $15-$30 (wire) Speed: 1-3 business days (ACH), same day (wire) Professionalism: Very high -- preferred by corporate clients Best for: US-based clients, projects over $500 Downside: Requires sharing bank details; slow for international PAYPAL Fee: ~3% + $0.30 per transaction (business payments) Speed: Instant to PayPal balance; 1-3 days to bank Professionalism: Medium -- fine for small clients, less common in corporate Best for: Small projects, freelancers just starting out Downside: Fee on every transaction adds up; disputes can freeze funds STRIPE (Payment Links) Fee: 2.9% + $0.30 per transaction Speed: 2 business days to bank Professionalism: High -- clean, professional checkout experience Best for: Clients who want to pay by credit card; product-style transactions Downside: Fee on every transaction; some clients prefer direct bank transfer WISE (TransferWise) Fee: 0.4-1.5% depending on currency Speed: Same day to a few business days Professionalism: High for international Best for: International clients; sending/receiving foreign currency Downside: Less known to US-only clients CHECK Fee: None (but costs you time to deposit) Speed: Mailing time + check clearing (2-5 days) Professionalism: Low -- suggests outdated systems Best for: Clients who insist on it (rare but happens with older businesses) Downside: Slow, can be lost, requires physical deposit RECOMMENDATION: Offer bank transfer as primary, Stripe payment link as backup. Never accept checks as a default -- it signals you'll accept anything. PART 5: INVOICE FOLLOW-UP EMAIL TEMPLATES =============================================================================== TEMPLATE 1: DAY 1 OVERDUE -- GENTLE REMINDER -------------------------------------------- Subject: Invoice #[NUMBER] -- Quick Reminder Hi [Client Name], Just a friendly reminder that Invoice #[NUMBER] for $[AMOUNT] was due on [DATE]. If you've already sent payment, please disregard this note -- it may just be crossing in the mail. If you have any questions about the invoice, I'm happy to help. Payment details: [PASTE YOUR PAYMENT INSTRUCTIONS HERE] Thank you! [Your Name] --- TEMPLATE 2: DAY 7 OVERDUE -- FIRMER, REFERENCE CONTRACT --------------------------------------------------------- Subject: Invoice #[NUMBER] -- Now 7 Days Overdue Hi [Client Name], I'm following up on Invoice #[NUMBER] for $[AMOUNT], which was due on [DATE] and is now 7 days past due. Per our agreement dated [CONTRACT DATE], a late payment fee of 1.5% per month applies to overdue balances. I'd like to resolve this before that becomes necessary. Could you let me know when I can expect payment, or if there's an issue I can help address? [PASTE YOUR PAYMENT INSTRUCTIONS HERE] Thank you, [Your Name] --- TEMPLATE 3: DAY 14+ -- FINAL NOTICE WITH LATE FEE APPLIED ---------------------------------------------------------- Subject: Final Notice -- Invoice #[NUMBER] -- Late Fee Applied Hi [Client Name], This is a formal notice that Invoice #[NUMBER] for $[AMOUNT] is now [X] days overdue. Per our contract, a late payment fee has been applied. Updated balance: $[ORIGINAL AMOUNT + LATE FEE] Late fee applied: $[LATE FEE AMOUNT] (1.5% of $[ORIGINAL AMOUNT]) Payment due immediately. If payment is not received within 5 business days, I will need to explore further options, including referral to a collections agency or small claims court filing. I'd prefer to resolve this directly. Please respond to this email or call me at [YOUR PHONE] to arrange immediate payment. [PASTE YOUR PAYMENT INSTRUCTIONS HERE] [Your Name] =============================================================================== Downloaded from SoloStack -- solostack.madethis.app Get 50+ done-for-you freelance business templates at /lp/freelance-templates ===============================================================================