Payment Terms

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  • Net-X Days: Net-X refers to X number of days you’re expecting payment. For example, if you write Net-0, you’re expecting prompt payment. Similarly, if you write Net-30, you’re expecting payment within 30 days.
  • MFI: MFI stands for “month following invoice.” For example, if you write 15 MFI, it means you want payment on the 15th of the next month after you issue the invoice.
  • PIA: PIA is short for “payment in advance.” What it basically means is that you’re expecting upfront payment before you begin working on the project. If you write 50% PIA, it means you want a 50% upfront payment. Similarly, 100% PIA refers to 100% advance payment.
  • CIA: CIA, also known as cash in advance, means you want your clients to pay in cash in advance. The advanced payment would ideally be of an X% (e.g., 30% CIA, 50% CIA, 70% CIA, etc.).
  • Upfront: Upfront means you want the payment before you begin working on a task for the client. Upfront payments are usually treated as a deposit, so there’s less of a worry of non-payment later on.
  • COD: Short for “cash on delivery,” COD means you want payment in as soon as the product/service is delivered by you. Because clients may choose not to pay in the moment, many companies prefer not to opt for the COD method.
  • EOM: EOM means “end of month.” If an invoice says “payment at EOM,” it means they’re expecting payment by the end of that month.
  • Upon Receipt: Upon receipt means immediate payment. So, as soon as you get the invoice, you process the payment (i.e., within the timeframe of a day).
  • Cash Account (no credit): What this means is you expect a cash payment, and you’re not willing to offer any credit to your clients.
  • Cash Account (letter of credit): This is the opposite of “cash account (no credit)” because here, you are expecting cash payment, but you will also accept a letter of credit from a reputable bank.
  • CWO: CWO, short for “cash with order,” means that you expect payment of all the products/services as soon as the order has been placed.
  • CND: The full form of CND is “cash before delivery.” What it means is that you’re expecting some down payment in order to begin working on the project that’s been assigned to you.
  • CBS: CBS, abbreviated for “cash before shipment,” means you want a deposit before you ship the product to safeguard yourself against non-payment.
  • Accounts Receivable: Accounts receivable refers to the balance total you’re owed by a client. For example, if New Client A owes you $500, then your accounts receivable for that client would be $500.
  • N/N Net-X Days: The “N” and “X” stand for numbers, and N/N Net-X days refer to payment deadlines and discounts. For example, if it would say 2/5 Net-20 days, it means you’re expecting payment within 20 days, but if the client processes payment within 5 days, you’ll give them a 2% discount on the entire invoice amount.
  • Waiver: Waiver refers to waiving an amount or a claim. For example, if you give a waiver on the security deposit, it means you’re not expecting a security deposit before working on a project.
  • Others: There are other important terms that are not-so-commonly used in invoices, but are still important to know about, such as RD (rollover deposit), contra, early payment, purchase order, etc.