Proposals · Glossary
What does due on receipt mean?
Due on receipt means the invoice should be paid as soon as the customer receives it, with no credit period. Most businesses read it as payment within a day or two, so it suits one-off jobs, new customers and small amounts, but it sets no fixed calendar date unless the contract defines one.
The phrase is short and the expectation behind it is vague. Knowing what it signals, and when a dated term works better, decides whether the money arrives this week or next month.
Nuwan Madhusanka · Co-founder
4 min read · Published
| Term | When payment is due | Typical use | Main risk |
|---|---|---|---|
| Due on receipt | When the invoice arrives | One-off jobs, private customers, new accounts | No firm date to chase against |
| Net 7 | 7 days after the invoice date | Small trades and freelance work | Tight for business customers with fortnightly pay runs |
| Net 14 | 14 days after the invoice date | Services billed when a job finishes | Customers may still batch payments |
| Net 30 | 30 days after the invoice date | Business to business supply | A month of finished work sits unpaid |
| Cash on delivery | At handover or completion | Retail sales and deliveries | Someone has to be there to take payment |
What the term asks for
Payment terms are the rules a business sets for how and when customers pay, and they form part of the contract for the sale. Due on receipt is the shortest credit term in common use: it says the money is owed the moment the invoice is delivered. It is different from payment in advance, where the customer pays before work starts, and from cash on delivery, where payment changes hands at the same time as the goods. An invoice marked due on receipt is usually sent after the work is done, so the customer has already had the benefit and is now being asked to settle straight away.
Why a vague term often gets paid late
Due on receipt has no number in it, and accounts teams schedule payments by dates. A customer who pays every second Thursday will often treat due on receipt as due in the next run, which can be thirteen days away. Worse, the term gives you nothing precise to point to when you chase. The fix is to keep the phrase but add a date: due on receipt, and no later than a named day three to five days after the invoice date. That keeps the urgency and gives both sides a deadline that a reminder can quote.
When it is the right choice
Due on receipt suits jobs where you will not deal with the customer again soon, private households paying from their own account, small invoices where credit control costs more than the amount, and anyone without a payment history with you. It suits large business customers poorly. Their procurement systems often cannot pay outside set terms, and in Australia the largest businesses report how quickly they pay small suppliers under the Payment Times Reporting Act 2020, which makes their standard terms the practical floor. Agree terms before the job rather than printing due on receipt and hoping.
What happens when no date is agreed
The law in some countries fills the gap. GOV.UK explains that between UK businesses, if no payment date has been agreed, payment becomes late 30 days after the customer receives the invoice or the goods, and statutory interest can then be claimed. A bare due on receipt may therefore be weaker than it looks if it is ever tested. In Australia, the contract terms and any industry rules govern what you can charge, so a dated term written into the quote and repeated on the invoice is the safer habit.
Where it shows up in the product
In the proposals module, invoices raised when a client accepts a proposal follow fixed rules: with a deposit, an issued deposit invoice due today plus a draft balance invoice; without one, a single issued invoice due in 14 days. An invoice turns overdue the day after its due date, and each invoice can run a reminder preset (off, gentle, standard or firm) with at most six reminders. Card payments go through a pay link that opens Stripe Checkout on the owner's connected account on paid plans, and bank transfers are marked paid by hand.
Questions people ask
Is due on receipt the same as cash on delivery?
No. Cash on delivery means payment changes hands at the moment the goods or work are handed over, so someone collects it in person or at the door. Due on receipt is a term on an invoice sent afterwards, which the customer settles remotely once it arrives. The money is due at a similar time, but the invoice term relies on the customer acting promptly.
How many days is due on receipt in practice?
There is no set number. Many small businesses treat it as one to three business days, while some customers read it as their next payment run. Because the reading varies, the safest approach is to print a calendar date beside the words, so the expectation is clear and a late payment is plainly late rather than a matter of interpretation.
Can a quote say payment is due on receipt of invoice?
Yes, and it should if that is the term you intend to invoice on. The quote is where the customer agrees to the terms, so stating due on receipt there, along with any deposit and the payment methods you accept, makes the later invoice a reminder of an agreed term rather than a new demand the customer never saw.
Does due on receipt make a late fee easier to charge?
Not by itself. A late fee or interest generally needs to be agreed in the contract before the work, and the date it runs from must be clear. A term with no calendar date makes the starting point arguable. Write the fee, the rate and the due date into the quote and repeat them on the invoice.
Should a tax invoice in Australia carry payment terms at all?
The ATO's list of what a tax invoice must show does not include payment terms, so leaving them off does not make the invoice invalid. Including them is still good practice, because the invoice is the document the customer's accounts team works from, and the term plus a date on it is what gets the payment scheduled correctly.
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Create a proposal with OneCraftRelated questions
- What does net 30 mean on an invoice?What does net 30 mean? The full invoice amount is due 30 days after the invoice date. How net terms work, variants like 2/10 net 30, and when to use them.
- What are EOM payment terms?What EOM payment terms mean: credit counted from the end of the invoice month, with worked due dates for net 30, 30 days EOM and 7 days EOM.
- What is an overdue invoice?What is an overdue invoice: an unpaid invoice past its due date, when it becomes overdue, a reminder ladder by days late, and the UK and Australian rules.
- What does 2/10 net 30 mean?What does 2/10 net 30 mean: a 2 percent discount if paid within 10 days, the full amount due in 30, a worked example, and the annual rate the discount implies.
Step by step in the builder: Send a proposal and get paid, then Set invoice reminders.
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