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Payment terms define when your customer must pay an invoice. For example, Net 30 gives them 30 days from the invoice’s issuing date to pay. The resulting due date appears on the invoice and its PDF. You can set a default for a billing entity or customer, then choose different terms for a subscription, wallet, or one-off invoice. You can also choose terms for individual billing items when preparing a quote.

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Choose a payment term

Lago offers six payment-term types. The examples below all use an invoice dated April 10, 2026 so you can compare the results.
The two terms that combine days and month-end use a different order. For an invoice dated April 10, adding 30 days after month-end gives May 30. Adding 30 days before moving to month-end gives May 31. Check the example due date in the payment-term form before saving.

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Choose the number of days

For Net days, Net days after end of month, and Days end of month, enter the number of days agreed with your customer. The 30-day examples above are not a fixed duration. For example, an invoice dated April 10 with Net 15 is due on April 25. With 15 net days after end of month, it is due on May 15. With 15 days end of month, it is due on April 30. Days are calendar days, including weekends. For example, Net 30 on an invoice dated January 31, 2026 gives a due date of March 2, 2026. You can enter from 0 to 365 days. With 0 days, these terms match a simpler one, and the invoice shows the simpler label:
  • Net 0 is shown as Due on receipt.
  • 0 net days after end of month and 0 days end of month are shown as End of month.

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Choose a day of the month

For Day of month, set Day of month and Month offset. The offset counts months from the invoice month; it defaults to 1, meaning the following month. You can choose a day from 1 to 31 and a month offset from 0 to 12. When the selected day does not exist in the target month, Lago uses that month’s last day.

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Which payment term applies?

Lago uses the most specific setting available, in this order:
  1. The term set on the subscription, wallet, or one-off invoice.
  2. The customer’s term, if the item has no term of its own.
  3. The billing entity’s term, if the customer has no term of their own.
  4. Due on receipt, if no term is configured at any of these levels.
Using the setting from the level above is called inheritance. To return to the default, choose the inheritance option instead of entering a term of your own. Selecting Due on receipt sets an explicit term; it does not mean “use the default.” For example, your billing entity uses Net 30, but one customer has negotiated Net 45. That customer’s invoices use Net 45 unless you set a more specific term. You can make their wallet purchases Due on receipt while leaving their subscription on Net 45. If you change an inherited default, future invoices follow the new default. A subscription or wallet with its own term keeps that term until you change it or restore inheritance.

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Set the billing entity default

Use this setting for the standard terms offered by your billing entity, such as Net 30 for an invoice dated April 10 to be due May 10.
  1. Open Settings and select the billing entity.
  2. Open Invoicing settings.
  3. Click Edit in Payment terms.
  4. Choose a Term type and enter any days or month settings it requires.
  5. Review the example due date, then save your changes.

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Set a customer’s payment terms

Use a customer setting when you have agreed different terms with that customer. For example, Net 45 gives them until May 25 to pay an invoice dated April 10, instead of May 10 under a Net 30 billing-entity default.
  1. Open Customers and select the customer.
  2. Open their Settings tab.
  3. In Payment terms, add or edit the customer’s term.
  4. Choose a Term type and enter its days or month settings.
  5. Review the example due date, then save your changes.
To use the billing entity’s default again, choose the inheritance option in the term selector. The customer’s settings display the inherited term.

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Set terms for a subscription, wallet, one-off invoice, or quote item

Choose a term when you create or edit the item, or keep the inherited term. On subscriptions, wallets, and one-off invoices, the term is in Invoicing settings. Each item can use any of the six payment-term types. Payment terms on a quote belong to its individual billing items. A subscription and a wallet in the same quote can have different terms. Subscriptions with different effective payment terms are billed on separate invoices. Terms that always give the same due date, such as Net 0 and Due on receipt, count as the same term. See invoice consolidation.

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Set payment terms from the API

Send a payment_term object on billing entities, customers, subscriptions, wallets, and one-off invoices. term_type sets the rule, and each type accepts only its own fields. A missing field, an extra field, or a value out of range returns a 422 validation error. Send "payment_term": null to clear a term and inherit from the level above. Invoices expose the term they were created with in payment_term, next to payment_due_date.

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Legacy net_payment_term field

Billing entities and customers still accept and return the integer net_payment_term field. The organization returns it for its default billing entity.
  • Sending net_payment_term: 15 alone sets { "term_type": "net", "days": 15 }.
  • When a request sends both fields, payment_term wins.
  • In responses, net_payment_term returns the days for net, 0 for due_on_receipt, and null for the four other types. Use payment_term to read the full term.
Subscriptions, wallets, and one-off invoices only accept payment_term. If you send net_payment_term to these endpoints, Lago ignores it and the inherited term applies.

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Invoice dates and later changes

Payment terms are calculated from the issuing date shown on the invoice. The billing period describes the service being billed. The grace period gives your team time to review a draft invoice before finalization. These are separate settings. In this Net 15 example, the issuing date matches finalization on November 15, so payment is due November 30:
October billing period, followed by a draft review period, finalization on November 15, and payment due on November 30 with Net 15 terms.

Net 15 when the invoice's issuing date and finalization date are both November 15

If you configure the invoice to keep an earlier issuing date, payment terms count from that date instead. See issuing date preferences. The issuing date follows the customer’s timezone, or the billing entity’s when the customer has none. For example, an invoice finalized on April 30 at 23:00 UTC for a customer in Pacific/Auckland is dated May 1, so End of month gives May 31. Lago stores the applicable payment term when it creates an invoice. Changing a customer’s, billing entity’s, subscription’s, or wallet’s terms affects future invoices. Existing invoices, including drafts, keep the term they were created with. For example, a draft invoice dated April 10 with Net 30 keeps Net 30 after you change the customer’s default to Net 60. Its due date remains May 10. If that draft’s issuing date later changes to April 12, its stored Net 30 term gives a new due date of May 12.

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Overdue invoices

An unpaid invoice is marked overdue after its payment due date has passed. Lago emits the invoice.payment_overdue webhook message. The invoice remains overdue until its payment succeeds, a payment dispute is recorded as lost, or the invoice is voided.