Net 30
Net 30 is a payment term meaning the full invoice amount is due within 30 days. It’s one of the most common payment terms in business-to-business transactions.
What Net 30 Means
"Net 30" = Full payment due in 30 days
- Net = Total amount owed (no discount)
- 30 = Number of days until payment is due
When Does the Clock Start?
The 30-day period typically begins from one of these dates:
| Start Date | Meaning | Example |
|---|---|---|
| Invoice date | Most common | Invoice dated Jan 1 → Due Jan 31 |
| Receipt of invoice | When buyer receives it | Received Jan 5 → Due Feb 4 |
| Receipt of goods | When goods arrive | Goods arrive Jan 10 → Due Feb 9 |
| End of month (EOM) | Net 30 EOM variant | Invoice in Jan → Due Feb 28 |
Tip: Check the invoice or contract to know which date applies.
Net 30 Calculation Examples
Standard Net 30
| Invoice Date | Due Date |
|---|---|
| January 1 | January 31 |
| January 15 | February 14 |
| February 28 | March 30 |
Net 30 EOM (End of Month)
Payment due 30 days after the end of the invoice month:
| Invoice Date | End of Month | Due Date |
|---|---|---|
| January 1 | January 31 | March 2 |
| January 15 | January 31 | March 2 |
| January 31 | January 31 | March 2 |
Common Payment Terms
| Term | Meaning |
|---|---|
| Net 10 | Due in 10 days |
| Net 15 | Due in 15 days |
| Net 30 | Due in 30 days |
| Net 45 | Due in 45 days |
| Net 60 | Due in 60 days |
| Net 90 | Due in 90 days |
| Due on receipt | Due immediately |
Early Payment Discounts
Many vendors offer discounts for faster payment:
2/10 Net 30
"2/10 Net 30" = 2% discount if paid within 10 days, otherwise full amount due in 30 days
| Payment Timing | Amount Due | Savings |
|---|---|---|
| Within 10 days | $980 (2% off) | $20 |
| Days 11-30 | $1,000 | $0 |
| After 30 days | $1,000 + late fees | Negative |
Common Discount Terms
| Term | Discount | If Paid Within | Otherwise Due |
|---|---|---|---|
| 1/10 Net 30 | 1% | 10 days | 30 days |
| 2/10 Net 30 | 2% | 10 days | 30 days |
| 3/10 Net 30 | 3% | 10 days | 30 days |
| 2/10 Net 45 | 2% | 10 days | 45 days |
| 2/15 Net 45 | 2% | 15 days | 45 days |
Is the Discount Worth It?
Calculate the annualized return:
2/10 Net 30: - Discount: 2% - Days accelerated: 20 (30 - 10) - Annualized: 2% × (365 ÷ 20) = 36.5% annual return
36.5% return for paying 20 days early—almost always worth taking!
Late Payment Consequences
Missing Net 30 deadlines can result in:
| Consequence | Typical Terms |
|---|---|
| Late fees | 1-2% per month |
| Interest charges | 12-24% annual |
| Credit hold | No new orders until paid |
| Credit rating impact | Reported to D&B/Experian |
| Relationship damage | Loss of vendor trust |
Negotiating Payment Terms
Factors Favoring Longer Terms
- Large purchase volume
- Long relationship history
- Strong credit rating
- Competitive vendor market
Factors Favoring Shorter Terms
- New customer relationship
- Previous payment issues
- Industry standard is shorter
- Vendor cash flow needs
Negotiation Example
Standard: Net 30 Request: Net 45 Compromise: Net 30 with 2/10 discount option
Net 30 by Industry
| Industry | Typical Terms |
|---|---|
| Professional services | Net 30 |
| Manufacturing | Net 30-60 |
| Construction | Net 30-45 |
| Retail | Net 30 or COD |
| Technology | Net 30 |
| Healthcare | Net 45-60 |
Best Practices for Buyers
- Track due dates - Use AP aging to monitor upcoming payments
- Take early discounts - Calculate if discount is worth accelerating payment
- Communicate proactively - If payment will be late, contact vendor early
- Document terms - Keep signed contracts with agreed payment terms
- Match payment to terms - Don’t pay early without discount, don’t pay late
Best Practices for Sellers
- State terms clearly - Print payment terms on every invoice
- Invoice promptly - Send invoices immediately to start the clock
- Offer discounts - Early payment discounts improve cash flow
- Follow up - Contact customers as due date approaches
- Enforce consistently - Apply late fees as documented
Related Terms
- Payment Terms - General payment timing agreements
- Remittance Advice - Payment application instructions
- AP Aging - Report of outstanding payables by age
Want to track payment due dates for all your vendor invoices? See how BillerPlus captures invoice terms at intake →