Net 30 Payment Terms
Net 30 means the full invoice amount is due 30 calendar days after the invoice date. It is the most common trade credit term in B2B sales. Variations change the clock or add a discount: Net 60 allows 60 days, Net 30 EOM counts from the end of the month, and 2/10 Net 30 offers 2% off for paying within 10 days.
How to calculate a Net 30 due date
Count 30 calendar days from the invoice date, including weekends and holidays, unless the terms say the clock starts at shipment or receipt. An invoice dated September 5 is due October 5.
Due date = invoice date + 30 calendar days
Common payment terms
These appear on purchase orders and invoices, and buyers expect the invoice to repeat the terms on the PO.
| Term | Meaning | Invoice dated Sept 5 is due |
|---|---|---|
| Due on receipt | Pay when the invoice arrives | On receipt |
| Net 15 | Full amount in 15 days | Sept 20 |
| Net 30 | Full amount in 30 days | Oct 5 |
| Net 60 | Full amount in 60 days | Nov 4 |
| Net 90 | Full amount in 90 days | Dec 4 |
| Net 30 EOM | 30 days after the end of the invoice month | Oct 30 |
| 2/10 Net 30 | 2% off if paid in 10 days, else full amount in 30 | Sept 15 with discount, Oct 5 without |
What 2/10 Net 30 is worth
Skipping a 2/10 Net 30 discount means paying 2% to hold the cash for 20 more days. Annualized, that is about 37%, which is why buyers with cash on hand take the discount.
Annualized cost = discount ÷ (100 − discount) × 365 ÷ (net days − discount days)
= 2 ÷ 98 × 365 ÷ 20 ≈ 37.2%Payment terms in EDI
On the EDI 810 invoice, terms travel in the ITD segment: ITD03 holds the discount percent, ITD05 the discount days, and ITD07 the net days. A buyer's system checks them against the PO, so an invoice with Net 30 against a PO that says Net 60 gets flagged.
Getting paid on time under Net 30
Late payment on Net 30 terms usually traces back to the invoice, not the buyer's cash. Invoices that fail the three-way match sit in an exception queue, and the 30 days effectively restart once the error is fixed. Accurate PO numbers, prices, and quantities on the first invoice are the most reliable way to shorten days sales outstanding.
Related Terms
Related Resources
Frequently Asked Questions
Net 30 means the buyer must pay the full invoice amount within 30 calendar days of the invoice date.
Yes. Net 30 counts calendar days, including weekends and holidays.
The buyer can take a 2% discount by paying within 10 days of the invoice date. Otherwise the full amount is due in 30 days.
Payment is due 30 days after the end of the month in which the invoice was issued, so a September 5 invoice is due October 30.
How to Answer "Are You EDI Capable?"
A buyer asked, and you need to answer this week. The four things they are checking, what you can say yes to today, and a realistic date for the rest.
- What a buyer is really asking when they ask this
- The minimum set-up that makes the answer yes
- What you can answer today versus what needs building
- Rough timelines, so you can give a date rather than a maybe
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