Payment term
- Consumer insolvency
- Standard insolvency
- Foreclosure
- Payment term
- Payment plan
- B2C
- B2B
- Base interest rate
- Credit Score
- Liquidity
- Affidavit
- Credit insurance
- Factoring
- Objection
- Foreclosure
- Default of payment
- SCHUFA
- Enforcement Officer
- Opposition
- Dunning notice
- Statute of limitations
- Receivable
- Enforceable title
- Debtor
- Creditor
What is a payment term?
A payment term is the period within which an invoice must be paid. It is a binding specification that defines the latest date by which the money must be received by the payee. This time frame is part of the payment conditions and ensures clarity about when the payment is expected.
Such arrangements are common in contracts, quotes, or invoices. Phrases like “payable within 14 days” or “due: 30 days net” indicate the deadline by which the outstanding amount must be transferred. The deadline is binding—it is not a suggestion, but a fixed component of the agreement.
When does the payment period begin?
In most cases, the countdown starts from the invoice date. If the document states “payable within 14 days” and it was issued on March 1, the deadline ends on March 15—calculated from the date of issue.
In some cases, the period begins only on the delivery date or the day the service was completed. What matters is the prior agreement between the parties. If no specific start date is mentioned, the invoice date generally applies.
Example:
Invoice date: May 10
Statement: “Payable within 14 days”
End of payment period: May 24 (inclusive)
The period thus includes the date of issue.
How long is the payment period in practice?
How much time one has to settle an invoice varies depending on the situation. There is no legally prescribed standard duration. However, the following time frames are common in practice:
7 days: For smaller amounts or online purchases
14 days: Often in consumer transactions
30 days: Standard period in B2B settings
60 to 90 days: For large-scale projects or framework agreements
If no time frame is stated, the invoice is considered payable immediately. This means the amount must be transferred without delay after receiving the invoice—at the latest within 30 days, unless otherwise agreed.
Where is the payment deadline specified?
The agreed time frame for payment is documented in several places. What’s important is that it is clearly and unambiguously stated. Common locations include:
Invoices: In the footer, directly below the total amount, or in a dedicated section
Contracts: Especially for recurring services or longer projects
General terms and conditions (GTC): Standard rules that apply to all customers
Quotes and order confirmations: Often with customized payment terms
Putting the agreement in writing is always a good idea—it helps avoid misunderstandings and provides legal clarity.
Mini checklist: How to recognize the payment period on an invoice
Does the document contain a phrase like “payable within … days”?
Is there a specific due date (e.g., “due on …”)?
Are the GTC mentioned? They may contain a standard payment term.
Does a contract or quote refer to a particular deadline?
If no deadline is given, payment is due immediately without any special time frame.
Who must adhere to the payment period?
The time limit applies to the party responsible for making the payment—that is, the debtor. This may be a private individual or a business, depending on who received the service or goods.
The recipient of the invoice is obligated to settle the outstanding amount in full within the agreed period. For third parties who are not part of the contract, the time frame has no legal effect.
If the debtor fails to pay on time, consequences may follow—such as reminders, interest, or a debt collection process. However, these aspects go beyond the scope of the basic definition and concern the consequences of payment default.