What are Payment Terms?

Payment terms are the conditions under which a UK business expects to be paid for goods or services, set out on an invoice or sales contract. Common examples include Net 7, Net 14, Net 30, and 2/10 Net 30 (a 2% discount if paid within 10 days). The Late Payment of Commercial Debts Act lets suppliers charge statutory interest of Bank of England base rate plus 8%, plus fixed compensation, on overdue commercial invoices.