Net 30, Pro Forma and Other Invoice Terms Decoded

Invoices come with their own small vocabulary. A client writes "Net 30" in an email, a supplier sends over a "pro forma," and you end up looking up the net 30 meaning before you can even reply.

Net 30 gives your customer 30 days to pay. A pro forma is a preview of the invoice, sent before the sale goes ahead so your customer can approve the price or pay upfront.

Net 30

The 30-day clock normally starts on the invoice date, so an invoice dated 1 March on Net 30 terms is due by 31 March.

Those are calendar days, so weekends and public holidays count.

"Net" comes from accounting, where the net figure is the total after any discounts or credits. Most invoices have none, so in practice Net 30 means the whole amount within 30 days.

Some contracts start the 30 days from delivery, or from the day the customer receives the invoice. People can count differently when the start date is left vague, so it helps to write the due date on the invoice right next to the terms. That way you and your customer are working from one date, which also makes a polite reminder easier to send if a payment runs late.

Net 7, Net 14, Net 60

The number after "Net" is how many days the customer gets to pay. Net 7 is a week, Net 14 is two weeks, and Net 60 is roughly two months.

Shorter terms bring cash in sooner, so plenty of freelancers and small suppliers use Net 14 or Net 7. Large companies often set their own supplier terms at 60 days, and smaller businesses frequently agree to them to win the work.

Pro forma invoices

The pro forma invoice meaning comes straight from Latin, where "pro forma" means "for the sake of form." It lists what you'll supply, the price and any VAT. It looks a lot like a normal invoice and works as a draft of one.

HMRC describes pro formas as a common way to sell to customers you haven't worked with before, or ones you're unsure will pay.

The customer pays against the pro forma, you deliver, and then the proper invoice follows.

Clients use them too, as it can help to get a purchase approved inside their own company, and goods crossing a border often need one for customs paperwork.

If you're VAT-registered, label it clearly as a pro forma. HMRC recommends adding the words "This is not a VAT invoice." Your customer needs a proper VAT invoice to reclaim VAT, so send one with its own invoice number within 30 days of getting paid or supplying the goods or service.

Getting paid

Whatever terms you choose, every invoice also needs to tell the customer where to send the money.

If some of your clients pay in euros, an Ampere EUR account gives you an IBAN to add to your invoice. SEPA transfers cost £0, and the money stays in euros until you decide to convert it to pounds. You can open an Ampere account online and put your account details straight onto your invoice template.

Other terms you'll see

Due on receipt: payment is due as soon as the customer gets the invoice, with no extra days built in.

EOM (end of month): the deadline falls at the end of the month the invoice is dated. Net 30 EOM gives the customer 30 days after the end of that month.

2/10 Net 30: the customer can take 2% off if they pay within 10 days. Otherwise the full amount is due in 30.

CIA or PIA: cash in advance or payment in advance. The customer pays before you start, often against a pro forma.

Deposit or staged payments: part of the price upfront and the rest at agreed stages or on completion.

Credit note: a document that reduces or cancels an invoice you've already sent, for example after a refund or a pricing mistake.

When nobody agreed on a date

Sometimes an invoice goes out with no terms on it at all.

For business-to-business sales in the UK, the law fills the gap. Under the Late Payment of Commercial Debts (Interest) Act 1998, payment is due 30 days after the customer receives the invoice or the goods or service, whichever comes later.

If they pay late, you can claim statutory interest at 8% plus the Bank of England base rate. You can also claim a fixed sum toward the cost of recovering the debt, which goes up with the size of the invoice.

Statutory interest also covers customers who miss agreed terms like Net 30, unless your contract sets its own late payment interest. A short line about late payment interest at the bottom of your invoice gently reminds customers the rule exists.