Net 30 means the full invoice amount is due 30 days after the invoice date. It is the most common business-to-business payment term in the United States, and it is also one of the most common reasons small suppliers run short of cash. This guide explains exactly what the term means, how to write it, and when it is worth offering.
What net 30 actually means
The word net refers to the total amount payable with no deductions. The number is the count of calendar days, not business days, before payment falls due. So an invoice dated 1 March on net 30 terms is due 31 March.
- Net 15: payment due 15 days after the invoice date.
- Net 30: payment due 30 days after the invoice date.
- Net 60 and net 90: longer terms, usually demanded by large buyers.
- Due on receipt: payment expected immediately.
When the clock starts
This is where most disputes begin. Unless your contract says otherwise, the clock normally starts on the invoice date. Some buyers operate from the date they receive the invoice, and some from the date it is approved internally. Write the start point into your terms so there is nothing to argue about later.
Net 30 versus 2/10 net 30
A term written as 2/10 net 30 means the buyer may deduct 2 percent if they pay within 10 days, otherwise the full amount is due at 30 days. Early payment discounts can pull cash forward, but the discount is a real cost. Work out what it costs you over a year before offering one as standard.
When offering net 30 makes sense
- The customer is established and has paid you on time before.
- You can comfortably fund 30 days of work before the money arrives.
- The contract value justifies the wait.
- You have run a basic credit check on a new commercial customer.
When to ask for shorter terms
New customers, one-off jobs, projects with high upfront material costs and customers with a history of late payment are all reasonable grounds for net 15, a deposit, or staged payments. You are allowed to set your own terms; the buyer is allowed to negotiate.
How to write the term on your invoice
State the term, the calculated due date and the late fee policy in the same place. For example: Terms: Net 30. Payment due 31 March 2026. A late fee of 1.5 percent per month applies to balances unpaid after the due date, where permitted by law. Confirm interest and late fee rules for your state and contract with an adviser.
What to do when a net 30 invoice goes past due
Follow a predictable escalation: a reminder just before the due date, one on the day, then structured follow-ups afterwards. AI Money Recovery drafts that follow-up from your own invoice data, requires your approval before anything is sent, and keeps every action in an auditable record.
Frequently asked questions
- What does net 30 payment terms mean?
- It means the full invoice amount is due 30 calendar days after the invoice date, with no deductions.
- Is net 30 from the invoice date or the delivery date?
- Usually the invoice date, unless your contract states otherwise. Write the start point into your terms to avoid disputes.
- Should a small business offer net 30?
- Only if you can fund 30 days of work before payment arrives and the customer has a reliable payment history. Otherwise consider net 15 or a deposit.
- What is 2/10 net 30?
- The buyer may take a 2 percent discount if they pay within 10 days; otherwise the full balance is due at 30 days.
Written by the AI Money Recovery team
Practical guides on invoices, payment terms and accounts receivable, founded by Alexander Lee Rhea. About us
General information, not legal or tax advice. Offer subject to applicable terms and conditions. Recovery is not guaranteed.