Due on receipt vs net 30: payment terms for contractors
2026-10-13 · 6 min read
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It's Thursday afternoon and the office is building the week's invoices. Monday's water heater swap at a house goes out due on receipt with a card link. Tuesday's leaking prep sink at a restaurant goes out net 30, because the manager said "send it to corporate," and corporate means an accounts payable inbox nobody at your shop has ever talked to. Then there's the property manager with six buildings. Nobody remembers what you agreed to last spring, so this invoice says net 15 and the last one said net 30. Forty days later you're looking at a list of open invoices and you can't tell which ones are actually late.
Due on receipt vs net 30 sounds like a bookkeeping detail. At a small trade shop it decides when the money shows up and how much chasing you do first. Here's how I'd pick terms for each kind of customer, and how to set them once so nobody has to remember.
The short answer
Bill homeowners due on receipt, with a pay link in the invoice. Give net 30 only to commercial accounts that send repeat work and pay through an accounts payable process, and agree on it in writing before the first job. A business customer you don't know yet gets net 15.
Consistency matters more than the terms you pick. If the same kind of customer always gets the same terms, you know the day an invoice turns late. If someone types terms in by hand on each invoice, you don't.
Due on receipt vs net 30, side by side
| Due on receipt | Net 30 | |
|---|---|---|
| When it's due | The day the customer gets the invoice | 30 days after the invoice date |
| Who it fits | Homeowners, one-time customers, small jobs | Commercial accounts with repeat work and an AP department |
| When the money shows up | Within days, if the invoice has a pay link | A month or more, depending on when their AP runs |
| What the customer needs | A link and a card | A W-9, a PO number, the right billing contact, sometimes a vendor setup form |
| Where it goes wrong | No pay link, so "due on receipt" turns into "whenever" | Invoice sent to the wrong person or missing a PO, and it sits rejected without anyone telling you |
| When to send the first reminder | 3 to 5 days after the invoice | A few days before the due date, then the day after |
What the wrong terms cost
Net 30 on a homeowner's invoice tells them there's no hurry, and they take you at your word. The furnace works, the bill goes on the counter, and by the time it's due they've half forgotten what it was for. Then your office has to make a phone call it never should have needed.
Due on receipt on a commercial account goes wrong in a different way. Their AP department ignores whatever your invoice says and pays on its own schedule. So the invoice shows overdue on day two, your reminders go to someone who can't speed anything up, and the relationship gets prickly over a bill that was always going to be paid on day 30. Meanwhile a commercial invoice that's really stuck, with a wrong PO or sent to the store instead of corporate, looks like every other late invoice. Nobody digs into it until two months have passed.
Mixed terms are worse than either. When the same customer gets net 15 one month and net 30 the next, nobody in your office can say which invoices are late without opening each one. That's how a stack of open invoices turns into an afternoon of guessing.
How to set terms once and let reminders follow them
Setting the terms is the easy part, and your invoicing software may already do it. Jobber, for example, includes due upon receipt, net 7, net 15, net 30, net 45 and net 60 as standard terms. It also lets you set separate defaults for residential and commercial clients and override them for a single client (Jobber help center, checked October 13, 2026). According to that page, a client entered with a company name instead of a person's name gets the commercial default. With that in place, the setup goes like this:
- Set the residential default to due on receipt.
- Set the commercial default to net 15 for businesses that haven't been approved for longer terms.
- Give net 30 one client at a time, only to accounts that have earned it, and note who approved it.
- Put a pay link in every invoice email. Due on receipt without a link is a suggestion.
- Time reminders from the due date. That way a net 30 account doesn't get nagged on day three and a homeowner doesn't go a month without a nudge.
- For commercial jobs, collect the PO number and the AP contact when the job is booked, so the invoice reaches someone who can pay it.
Software rarely handles step 6 on its own, so that's where I'd start. For commercial jobs, the intake form or booking call asks two extra questions. The answers go on the client record, and the invoice can't go out without them. The reminder sequence then runs off the due date. For the wording of those reminders, the overdue invoice email sequence goes from polite to final notice.
Whether to collect at the job or bill afterward is a separate decision, covered in pay on site vs invoice later.
What stays human
Deciding who gets net 30 is a judgment about a relationship, and you make it. A property manager who has sent you forty jobs and always pays on day 28 has earned terms. A new restaurant group asking for net 60 on its first job is asking you to finance it, and only you can decide whether that's worth it.
So does the phone call when a big commercial invoice is really stuck. A reminder email can tell AP the bill is open, but it won't find out that their new controller now wants invoices uploaded to a vendor portal. A person at your shop learns that by calling.
Late fees and firmer language are your call too. The rules on what you can charge and how you have to disclose it vary, so check with your accountant or attorney before you add a late fee to your terms. I leave late fees out of a sequence until the owner has done that.
Where to start
Pull last quarter's invoices and sort them by customer type. If homeowners pay slowly, due on receipt plus a pay link usually fixes it. If commercial invoices are the slow ones, look for missing PO numbers and invoices that went to the wrong AP contact. There's more on what this setup looks like for plumbing contractors and HVAC contractors, and I'm glad to set it up in the tools you already use. Builds start at $500, then a flat monthly from $99 after the included run-in period, and you can cancel anytime. If you'd rather talk it through first, book the free 20 minute process audit.