Payment terms, explained plainly.
“30 days from statement” can mean waiting almost two months for your money. Here’s what the common South African payment terms really mean, and how to set yours so invoices get paid on time.
By Kyle Zorger, founder of ARS Financial · Updated · 5 min read
In short
- 30 days (or “net 30”) means payment is due 30 days after the invoice date.
- 30 days from statement means 30 days after the month-end statement, so an invoice from early in the month can take close to 60 days.
- COD means cash on delivery; EOM means payment is due at the end of the month.
- Your agreed terms are what count for private customers. Government departments must pay within 30 days of receiving an invoice.
- Put the actual due date on every invoice, and get your terms accepted before you start the work.
Common payment terms and what they mean
- Upfront or pro forma: payment before you deliver or start.
- COD (cash on delivery): payment when the goods or work are handed over.
- 7 or 14 days: payment due 7 or 14 days after the invoice date.
- 30 days, or net 30: payment due 30 days after the invoice date.
- EOM (end of month): payment due at the end of the month the invoice was issued in.
- 30 days from statement: payment due 30 days after the month-end statement that includes the invoice.
Why “30 days from statement” takes so long
Statements usually go out at the end of each month. An invoice dated 3 March appears on the 31 March statement, and payment is then due 30 days later, at the end of April. That’s close to 60 days after you did the work.
It’s common with larger customers and in trades like construction and wholesale. If your cash flow can’t carry that, negotiate shorter terms up front, or ask for a deposit.
Choosing terms for your business
- New customers: upfront, COD or 7 days until they’ve built a track record.
- Larger jobs: a deposit, then staged invoices as the work progresses.
- Regular customers with a good record: 30 days, with a credit limit.
- Anyone who has paid late before: shorter terms, or no further credit until their account is up to date.
Make your terms stick
- Put your terms on every quote, and get the quote accepted in writing.
- For account customers, use a signed credit application that includes your terms, interest on late payment and, for companies, a director’s suretyship.
- Write the actual due date on every invoice, not just “30 days”.
- Send a reminder before the due date, and follow up on the day it passes. Our guide on clients who pay late has a full reminder schedule.
Is there a legal limit on payment terms?
For private businesses there’s no general legal deadline; the terms you agree with the customer are what count. The public sector is different: unless the contract says otherwise, national and provincial departments must pay suppliers within 30 days of receiving an invoice under Treasury Regulations, and municipalities have a similar 30-day rule under the Municipal Finance Management Act.
Frequently asked questions
Payment is due 30 days after the month-end statement that lists the invoice. For an invoice issued early in the month, that can mean waiting close to 60 days.
Payment is due 30 days after the invoice date. It’s the same as “30 days”.
The shortest your customers will accept. Upfront, COD or 7 days for new customers, deposits on larger jobs, and 30 days only for regular customers with a good payment record.
They’re in default. You can generally charge interest if they agreed to it, or at the prescribed rate, and you can follow up with reminders, a letter of demand and, if needed, hand the debt over.
Hand us the invoice. We’ll take it from here.
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