Payment terms
The agreed rules for how and when a client pays - amounts, due dates, deposits and what happens if an invoice is late.
For example, a contract sets 50% upfront and 50% on delivery, with invoices due net 15 and a late fee after that. Clear terms mean the agency is not financing the client's project out of its own cash flow.
Why it matters to agencies: payment terms are what stand between an agency and a cash-flow crisis. Upfront deposits, short due dates and late fees keep money moving and the power balanced - lax terms are how profitable agencies still end up unable to make payroll.
Net 15-30 days is typical; shorter terms - or deposits and milestone billing - protect agency cash flow.
- Defaulting to long net terms that strangle cash flow.
- No late-payment interest or stop-work clause.
- Invoicing slowly, which delays the whole cycle.
What are payment terms?
The agreed rules for how and when a client pays - amounts, due dates, deposits and what happens if an invoice is late.
What does net 30 mean?
The invoice is due 30 days after it is issued; net 15 or net 7 simply shorten that window.
Should agencies take a deposit?
Usually yes - an upfront deposit funds the early work and signals the client's commitment, reducing both cash-flow and cancellation risk.
How do you handle late payments?
Set clear due dates and late fees in the contract, invoice promptly, and pause work if an account falls seriously overdue.