If you've ever wondered what 'Net 30' means on an invoice, you're not alone. Payment terms like Net 15, Net 30, and Net 60 are everywhere in business, but they're rarely explained. This guide breaks down everything you need to know about invoice payment terms — what they mean, when to use each, and how to choose the right terms for your business.
What Does Net 30 Mean?
Net 30 is a payment term meaning the full invoice amount is due within 30 calendar days of the invoice date. The '30' refers to days, and 'net' refers to the total amount owed.
For example: If you send an invoice dated January 1st with Net 30 terms, payment is due by January 31st.
Important details:
• The 30 days includes weekends and holidays
• The clock starts from the invoice date, not delivery date
• 'Net 30' and '30 days net' mean the same thing
• Full payment is expected — not partial or installments
Net 30 is the most common B2B payment term in both the US and Europe. It's considered the standard for professional services, wholesale, and business-to-business transactions.
Common Payment Terms Explained
While Net 30 is most common, you'll encounter several payment term variations. Here's what each means:
Due on Receipt (DOR) — Payment expected immediately upon receiving the invoice. Best for small transactions, new clients, or industries with cash-focused business models.
Net 7 — Payment due within 7 days. Used for urgent transactions or clients with cash flow concerns. Popular with service businesses.
Net 10 — Payment due within 10 days. A middle ground between immediate payment and longer terms. Common in retail and some service industries.
Net 15 — Payment due within 15 days. Increasingly popular for freelancers and small businesses who need faster cash flow. Works well for recurring clients.
Net 30 — Payment due within 30 days. The B2B standard. Offers balance between professionalism and reasonable payment timeline.
Net 60 — Payment due within 60 days. Common with larger corporations and enterprise clients. Strains cash flow for smaller suppliers.
Net 90 — Payment due within 90 days. Reserved for major corporate clients. Typically includes negotiations on pricing to compensate for delayed payment.
EOM (End of Month) — Payment due at the end of the month in which the invoice was received. Example: Invoice dated January 15th is due January 31st.
Early Payment Discounts: 2/10 Net 30
You may see payment terms like '2/10 Net 30' or '1/10 Net 30'. Here's what they mean:
2/10 Net 30 = 2% discount if paid within 10 days, otherwise full amount due in 30 days
Breaking it down:
• 2 = discount percentage (2%)
• 10 = days to qualify for discount
• Net 30 = standard term if discount not taken
Example: On a €1,000 invoice with 2/10 Net 30 terms:
• Pay within 10 days: €980 (€20 saved)
• Pay between 11-30 days: €1,000 (full amount)
Other common variations:
• 1/10 Net 30 — 1% discount for payment within 10 days
• 2/10 Net 60 — 2% discount for payment within 10 days of a 60-day term
• 3/15 Net 45 — 3% discount for payment within 15 days of a 45-day term
Should you offer early payment discounts? If cash flow is important (it usually is), offering 1-2% for early payment can significantly improve your receivables. Many clients will take the discount, and you benefit from faster cash.
Which Payment Terms Should You Use?
Choosing the right payment terms depends on several factors. Here's a framework:
Use Due on Receipt or Net 7 when:
• Working with a new, unvetted client
• The transaction amount is small (under €500)
• You have limited cash flow runway
• Industry standard is immediate payment
Use Net 15 when:
• You're a freelancer or small business
• Projects are under €5,000
• You want professional terms but need decent cash flow
• Client is a small-to-medium business
Use Net 30 when:
• Working with established corporate clients
• The relationship is ongoing and trusted
• You have sufficient cash reserves
• This is industry standard for your sector
Use Net 60 or Net 90 when:
• Required by large enterprise clients
• You can negotiate higher pricing to compensate
• Your margins support delayed payment
• The relationship is strategic (volume, prestige)
General rule: Start with shorter terms (Net 15) and extend to Net 30 for proven, reliable clients.
How to Set Payment Terms in Your Invoice
Clear presentation of payment terms prevents confusion and late payments. Here's how to do it right:
Be explicit, not vague:
• Good: 'Payment due by January 31, 2026 (Net 30)'
• Bad: 'Net 30'
• Worse: 'Payment due soon'
Include all essential information:
• Payment term (Net 15, Net 30, etc.)
• Exact due date
• Accepted payment methods
• Bank details or payment link
• Late payment fee policy (if applicable)
Position prominently — Payment terms should be easy to find, not buried in fine print. Place them near the total or in a dedicated 'Payment Details' section.
Reinforce in your email — When sending the invoice, mention the due date in the email body: 'Payment of €2,450 is due by January 31st.'
Use invoicing software — Tools like PayRequest automatically calculate due dates based on your terms and display them prominently. No manual date math required.
Late Payment Fees and Interest
What happens when clients pay late? You can charge late fees, but you need to set this up properly.
Legal framework (EU) — The EU Late Payment Directive allows businesses to charge interest on overdue invoices. In the Netherlands, you can charge the statutory commercial interest rate (currently around 12%) on B2B transactions.
Typical fee structures:
• Flat fee: €25-50 for each overdue invoice
• Percentage: 1.5-2% of invoice amount per month
• Interest: X% annual rate calculated daily
Setting late fees:
• Include late fee policy in your terms and conditions
• Mention fees on the invoice itself
• Send warning before applying fees
• Apply fees consistently — selective enforcement weakens your position
Example invoice text: 'Payment terms: Net 30. Invoices not paid within 30 days will incur a 2% late fee per month.'
Practical reality: Many businesses include late fee clauses but rarely enforce them for the first offense. The threat alone often motivates payment. Use escalating consequences for repeat offenders.
How Payment Terms Affect Cash Flow
Your payment terms directly impact your business cash flow. Here's the math:
Scenario: You invoice €10,000/month in work
With Net 15 terms:
• Cash arrives ~15 days after invoicing
• Average accounts receivable: ~€5,000
With Net 30 terms:
• Cash arrives ~30 days after invoicing
• Average accounts receivable: ~€10,000
With Net 60 terms:
• Cash arrives ~60 days after invoicing
• Average accounts receivable: ~€20,000
The longer your payment terms, the more working capital you need. A freelancer who moves from Net 15 to Net 60 needs an extra 45 days of expenses in reserve.
Cash flow strategies:
• Shorter terms for smaller clients, longer for enterprise
• Request deposits (25-50% upfront) for large projects
• Offer early payment discounts to accelerate cash
• Use payment links for instant payment option
Negotiating Payment Terms with Clients
Payment terms are negotiable. Here's how to handle common situations:
Client requests longer terms (Net 60 instead of Net 30):
• Ask why — understand their payment cycle
• Counter with deposit + Net 60 for final payment
• Offer Net 60 at higher rate, Net 30 at standard rate
• Accept for strategic clients with clear value
Client consistently pays late:
• Shorten terms (move from Net 30 to Net 15)
• Require deposits on future work
• Enforce late fees
• Pause work until outstanding invoices are cleared
You want shorter terms but client pushes back:
• Explain your cash flow needs professionally
• Offer early payment discount as incentive
• Start the relationship with their terms, renegotiate after proving value
Key principle: Payment terms should work for both parties. Be willing to negotiate, but know your limits.
Industry Standards for Payment Terms
Different industries have different norms. Here's a quick reference:
Freelance & Creative Services — Net 15 to Net 30. Shorter terms are increasingly common. Deposits often required for larger projects.
B2B Professional Services — Net 30 standard. Net 60 for enterprise clients. Monthly retainers often paid in advance.
Wholesale & Manufacturing — Net 30 to Net 60. Longer terms for established relationships. Early payment discounts common.
Software & SaaS — Varies widely. Subscription models often require upfront payment. Enterprise contracts may be Net 30-60.
Retail — Due on Receipt or COD (cash on delivery). Quick payment is standard.
Construction — Progress payments at milestones plus retention. Complex terms tied to project phases.
Healthcare — Net 30 to Net 90 depending on payer (insurance, government, private). Often delayed by claims processing.
Remember: Industry standards are guidelines, not rules. You can set terms that work for your business, even if they differ from the norm.
Using Technology to Manage Payment Terms
Modern invoicing tools make payment term management effortless. Here's what to look for:
Automatic due date calculation — Enter your terms once, and the software calculates due dates for every invoice. No manual math.
Payment reminders — Automated emails before and after due dates. PayRequest's dunning feature sends professional reminders so you don't have to.
Payment links — Let clients pay instantly regardless of terms. Many will pay immediately even with Net 30 terms if it's easy enough.
Aging reports — See at a glance which invoices are current, approaching due, or overdue. Prioritize follow-up effectively.
Multiple payment methods — Accept cards, bank transfers, and digital wallets. The easier you make it to pay, the faster clients pay.
PayRequest tip: Set up automatic payment reminders 3 days before due, on the due date, and 7 days after. Most clients simply forget — a gentle reminder is all they need.
Getting Started: Your Payment Terms Checklist
Ready to set professional payment terms? Here's your action plan:
1. Evaluate your cash flow needs — How long can you wait for payment? This determines your baseline terms.
2. Research industry standards — Know what's normal in your sector. You can deviate, but be prepared to explain.
3. Set default terms — Pick one term (we recommend Net 15 for freelancers, Net 30 for B2B) as your standard.
4. Create tiered policies — Consider different terms for different client types (small business vs. enterprise).
5. Document late fee policy — Decide on fees and include them in your terms. Even if you rarely enforce, having them matters.
6. Update invoice template — Add clear payment terms, exact due dates, and payment methods to every invoice.
7. Set up automation — Use invoicing software with automatic reminders. This alone can improve payment times by 30%+.
With PayRequest, you can set your default payment terms once and apply them to every invoice automatically. Combined with payment links that let clients pay instantly, you'll spend less time chasing payments and more time doing what you do best.