Invoicing language is full of abbreviations that nobody ever explained to you. This glossary covers the terms that actually appear on small-business invoices in the U.S. — what each one means, when it is used, and how it affects your cash flow.
Net terms. Net X — Payment is due X calendar days after the invoice date.
Immediate-payment terms. Due on Receipt (DOR) — Payment is expected as soon as the invoice is received.
Discount terms. 2/10 Net 30 — 2% discount if paid within 10 days, otherwise full balance due in 30 days.
Project & construction terms. Retainage / Retention — A percentage (typically 5–10%) of each progress payment held back by the customer until the project is fully complete.
Late-payment terms. Late Fee / Service Charge — A surcharge applied after the grace period (commonly 1–1.5% per month).
Frequently asked questions
What does 'Net 30 EOM' mean?
Payment is due 30 days after the end of the month in which the invoice was issued. A June 1 invoice with Net 30 EOM terms is due July 30.
What is the difference between a deposit and a retainer?
A deposit is applied against a specific invoice or project total. A retainer is a recurring or upfront payment that secures access to your services over a period of time and may or may not be drawn against specific deliverables.
