Question 1

What does Net 30 mean?

Accepted Answer

The full invoice amount is due within 30 days of the invoice date. No discount for early payment, no interest until the 30 days pass. It's the standard payment term in B2B transactions.

Question 2

What does 2/10 Net 30 mean?

Accepted Answer

Pay within 10 days and get a 2% discount; otherwise, the full amount is due in 30 days. That 2% might not sound like much, but annualized, taking the early discount is equivalent to earning about 36% on your money. Smart companies almost always take it.

Question 3

What happens if a client pays after the net terms expire?

Accepted Answer

You can charge late fees or interest if your contract allows it. Many contracts specify a late payment rate — typically 1–1.5% per month. Without a late fee provision, you may have limited recourse beyond nagging. Always include late payment terms in your contracts.

Question 4

Can I negotiate shorter payment terms?

Accepted Answer

Absolutely. If Net 60 doesn't work for your cash flow, propose Net 15 or Net 30. You can also offer a small early payment discount as an incentive. The worst they can say is no, and many companies will negotiate rather than lose a good vendor.

Question 5

Are net terms the same as credit terms?

Accepted Answer

Essentially, yes. When you sell on net terms, you're extending credit to the buyer — they have your goods or services before they've paid. That's why credit checks on new B2B customers matter, especially for large orders on Net 60 or Net 90 terms.

Net Terms

Definition

In Practice

Common in these contract types

Related terms

Frequently asked questions about net terms

Create a contract with proper net terms clauses