Net 30 or net 15 on a placement fee
Net 30 is the usual ask on a placement fee, and net 15 is winnable more often than most firms assume. Among 21 established recruiting firm owners and leaders at 20 firms, 10 give clients net 30 and 8 give net 15. Fifteen days of terms is real money on a five-figure fee, and asking for it costs nothing while discounting for it costs a great deal.
Is net 30 or net 15 standard for a placement fee?
Both are standard, and the split between them is much closer than general business advice suggests. In our survey of 21 established recruiting firm owners and leaders at 20 firms, 10 reported net 30, 8 reported net 15, 2 reported net 45 or longer, and 1 varies by client. Counts are given with their denominator because 21 responses do not support a percentage, and no cut by firm size reaches ten responses.
That matters because the standard advice outside recruiting is one-sided. The US Chamber of Commerce describes net 30 as "the default option used by most businesses", which is true across business generally and is a weaker claim inside direct-hire recruiting than it looks. A placement fee is a single line item on a one-off invoice against a signed fee agreement. It does not behave like a recurring supplier account, and the firms that ask for net 15 get it often enough that the two terms are close to even in this group. The full set of counts sits in the recruiter compensation survey report.
What does 15 days of terms cost you in cash?
On a book of 24 placements a year at a $35,000 fee, the difference between net 30 and net 15 is about $34,500 of your own cash standing out at any moment. The arithmetic below is illustrative. It uses the survey's own median fee against the terms the group reported, and it is not a figure from any firm.
| Terms on the invoice | Average cash held by terms alone | Against net 15 |
|---|---|---|
| Net 15 | $34,521 | Baseline |
| Net 30 | $69,041 | $34,520 more |
| Net 45 | $103,562 | $69,041 more |
The method is deliberately plain: $840,000 billed in a year, multiplied by the term length over 365. It assumes every client pays exactly on the due date, which no client does, and that is the point of reading it as a floor rather than a forecast. It is the cash the terms alone commit you to, before a single invoice runs late.
Two things follow from the shape of that table. The first is that the gap grows with the size of the book, so a firm doing twice the volume is deciding twice the number. The second is that net 45, which 2 of the 21 reported, costs roughly three times what net 15 does for the same work.
When can you ask for net 15 and get it?
Net 15 is winnable when the invoice is small enough to clear a single approval and the ask happens before the search starts. After the placement, you are asking a client to change a term in a signed agreement in your favor, which is a different conversation and a worse one.
| Condition | Why it decides the answer |
|---|---|
| The fee clears one approver rather than a procurement queue | A single signer can pay inside 15 days. A queue cannot, whatever the invoice says |
| The client runs weekly or twice-monthly payment runs | Net 15 only works if a payment run falls inside the window |
| You are negotiating the fee agreement, not sending the invoice | Terms are a clause, and a clause is cheap to set and expensive to change |
| You have something to trade | A shorter term is worth giving up a point of fee percentage or an exclusive window on the search |
The condition most firms get wrong is the second one. A client whose accounts payable runs on the 1st and the 15th cannot pay a net 15 invoice dated the 16th without breaking its own process, so the invoice sits until the 1st and you have a term that is ignored by default. Ask what the payment run looks like before you ask for the term. That one question does more for the due date than the number on the invoice.
When is net 30 the better ask?
Take net 30 when the client's procurement standard sets the term anyway, and spend the negotiation on something you can actually win. Large clients publish supplier payment terms and their AP systems enforce them. A net 15 invoice into that machine does not get paid in 15 days. It gets paid in 30 and leaves you with a due date you cannot escalate on, because the invoice was late by a standard the client never agreed to.
A term the client will not honour is worse than a longer term the client will, because the whole value of a due date is having a clean basis for the follow-up that comes after it. What your terms do and do not control is covered in the guide to how recruiting firms invoice and collect, and that is the page to read before rewriting a fee agreement.
Should you buy the days back with an early payment discount?
An early payment discount on a placement fee is some of the most expensive money a recruiting firm can borrow. A 2% discount for payment in 10 days instead of 30 buys you 20 days at an annualized cost of about 37%.
| Offer | Cost on a $35,000 fee | Days bought | Annualized cost |
|---|---|---|---|
| 2% if paid in 10 days, otherwise net 30 | $700 | 20 | About 37% |
| 1% if paid in 10 days, otherwise net 30 | $350 | 20 | About 18% |
| Ask for net 15 in the fee agreement | $0 | 15 | None |
The annualized figure is the discount divided by what you actually collect, scaled to a year: 2% over 98% is 2.04%, and 365 days over 20 is 18.25 periods, which gives about 37%. Compare that with any line of credit you have been offered. On a recurring supplier relationship the discount can still pay for itself in administrative savings, because it buys predictability across hundreds of invoices. On twenty-four one-off invoices a year it buys 20 days and nothing else.
There is a narrower case where it works. A client who wants the discount will usually tell you so, because their own finance team is measured on capturing them. If an enterprise client asks whether you offer early payment terms, that is a client who will actually pay in 10 days, and 1% to a reliable payer who was going to be slow is a different trade from 2% advertised to everybody.
What does shortening the terms not fix?
Terms govern the client's half of the clock, and on most direct-hire books the firm's own half is longer. The days between the trigger event and the invoice going out belong entirely to you, and no term length touches them. A net 15 invoice sent three weeks after the start date pays later than a net 30 invoice sent the same day.
That is not a reason to leave the terms alone. It is a reason to fix the cheaper half first, and 17 of the 21 firms in the survey already invoice on the same day. The whole interval, and how to measure the part nobody tracks, is the subject of time to cash for recruiting firms. For the collection habits that sit on top of the terms, the placement fee collection playbook covers the sequence.
How do your client terms set your recruiters' pay date?
If you pay commission on cash received, the term you give the client is the term you give your recruiter. Fifteen of the 21 firms surveyed pay commission only when the client's money arrives, so moving a client from net 30 to net 15 moves a recruiter's pay date by two weeks on every deal that client places.
That makes the terms decision a compensation decision as much as a cash one, and it is worth saying out loud to the recruiter who negotiated the fee agreement. What the plan document has to say for pay-on-cash to be fair is covered in when recruiters get paid on cash received.
What to do first
- Pull your last ten paid placement invoices and write down the term on each and the day the money actually cleared. If the terms vary without a reason you can state, that is the first thing to fix.
- Ask your three largest clients what their payment run looks like. Set the term to land inside it rather than outside it.
- Put the term in the fee agreement for every new client, at the stage where it is a clause rather than a favour.
Frequently asked questions
Is net 15 realistic for a $50,000 placement fee?
Less often than for a $20,000 one, because larger invoices tend to need a second approver and a purchase order. The size of the fee is a reasonable proxy for how many people have to touch it, and the number of approvers is what actually sets the speed. Ask for net 15 and expect to land on net 30 with a named approver, which is a better outcome than net 15 with nobody accountable.
Does shortening the terms actually get you paid sooner?
Only if the shorter window contains one of the client's payment runs. A term is an instruction to a process that already has a rhythm, and a net 15 invoice that misses the run is paid on the next one. This is why asking about the run matters more than winning the number.
Should a recruiting firm ever invoice due on receipt?
It reads as a term and functions as a request, because almost no corporate AP process can pay on the day of receipt. It is defensible on a deposit or an engagement fee that is a condition of starting work, where the clock before the work begins is yours to set. On a completed placement it usually produces a due date you will not enforce.
What about charging interest on a late placement fee?
Late payment interest is common in fee agreements and is governed by state law on what rate is enforceable, so the clause belongs with your counsel rather than with a template. Nothing on this page is legal advice. In practice the clause does more work as a reason to call than as a line you ever collect.
Where should the payment terms live?
In the signed fee agreement, with the invoice repeating them as an explicit calendar date. A term that exists only on the invoice is a term the client's AP department can treat as a preference, and a date is harder to misread than a label.
Set the term where it is still a clause
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