Invoice payment terms for Australian small business: what to set and how to make them stick

Updated 5 August 2026 · By the Badger team

Payment terms are the cheapest lever in credit control: they cost nothing to set, and they decide when the money arrives — or whether it arrives at all. Most late-payment pain is really a terms problem: terms too long, agreed too late, or never really agreed. Here's what to set and how to make them stick.

7, 14 or 30 days?

• 7 days — normal for trades, services and anything invoiced on completion. If your customers are consumers or small businesses, there's rarely a reason to offer more.
• 14 days — the modern small-business default: enough time for any reasonable payment run, short enough that the invoice doesn't go stale in an inbox.
• 30 days — the convention when invoicing larger companies with formal accounts-payable processes. Offer it when the customer's process genuinely requires it, not out of habit.

The evidence and the folk wisdom agree: shorter terms get paid faster, because due dates anchor behaviour. "Due on receipt" tends to backfire, though — it reads as "no particular date," and no date means no anchor. Pick a real number of days and print the actual due date on the invoice.

Agree terms before the work — or they barely exist

Terms have real force when the customer accepted them before the sale: on your quote, engagement letter, credit application, or signed terms of trade. Terms that first appear on the invoice are close to decorative — the customer never agreed to them, and if it ever came to a dispute you'd struggle to enforce anything beyond payment of the debt itself. The practical routine: one line in every quote ("Payment terms: 14 days from invoice; overdue amounts accrue interest at X% p.a.") and a yes in writing before you start. That single sentence quietly carries your interest clause, your deadlines, and your standing if things go wrong.

Deposits and progress payments

For new customers, large jobs, or anything with materials up front, take a deposit — commonly somewhere between 10% and 50% depending on the industry — and break long jobs into progress payments. The point isn't just cash flow: a customer's behaviour on the deposit is the cheapest credit check you'll ever run. Someone who quibbles about paying anything before work starts is telling you exactly how the final invoice will go.

Make paying frictionless

Every step between "decides to pay" and "has paid" loses you days. Put BSB and account details (or a payment link) on the invoice itself, keep the invoice number and amount unmissable, and re-attach the invoice to every reminder so "can you resend it?" never buys another week.

Enforcement is follow-up, not fine print

Terms only work if the calendar means something. That means a reminder within days of the due date, every time, for every customer — the wording matters less than the consistency. A business that chases on day 3 trains its customers to pay on time; a business that chases "eventually" trains them to pay eventually. If nobody owns that routine, that's the gap accounts receivable software fills: Badger watches every due date, opens courteously, escalates on schedule, and stops the instant payment lands — your terms, actually enforced.