Payment terms refer to the conditions under which a buyer agrees to pay a seller for goods or services. These terms typically include details such as the payment amount, due date, and acceptable payment methods. Common payment terms might specify whether payment is required upfront, upon delivery, or within a certain number of days after the invoice date. Understanding payment terms is crucial for both buyers and sellers, as they help manage cash flow and expectations. For example, net 30 means the buyer must pay within 30 days of receiving the invoice, while cash on delivery requires payment at the time of delivery.