What does 'Net 30' payment terms mean?

Net 30 means the buyer must pay the full invoice within 30 days of the invoice date. Common variants: Net 15 (15 days), Net 60 (60 days), Net 90 (90 days). 'Due on Receipt' or 'Net 0' means immediate payment. Most B2B contracts use Net 30 as default.

Net 30 — and its cousins Net 15, Net 60, Net 90 — are payment terms specifying when an invoice must be paid in full. The number represents calendar days from the invoice date (not delivery date or contract date).

Common variants:

  • Due on Receipt / Net 0 — immediately upon invoice. Used for retail, low-trust relationships.
  • Net 7 / Net 15 — small businesses, freelancers, urgent work.
  • Net 30 — the de facto B2B standard.
  • Net 45 / Net 60 — large corporations, government contracts.
  • Net 90 — Fortune 500 companies, retail vendors, government agencies.
  • Cash in Advance (CIA) — payment before any work begins.
  • Cash on Delivery (COD) — payment when goods/services are delivered.

Discount terms combine deadlines with early-payment incentives:

  • 2/10 Net 30 — 2% discount if paid within 10 days; otherwise full amount due in 30.
  • 1/15 Net 45 — 1% discount if paid within 15 days; otherwise due in 45.

Late fee terms are added on top:

  • 'Net 30, 1.5% per month thereafter' — late fee starts at day 31.
  • 'Net 30, $25 late fee + 1.5% per month' — flat fee + interest.

Why long terms hurt freelancers: Net 60-90 means you're essentially loaning the client your money interest-free. For small businesses, this can crush cash flow — you've paid expenses, paid taxes, but haven't been paid yourself.

Best practices for freelancers and small businesses:

1. Default to Net 15 or Net 30 for new clients. 2. Require deposits for projects over $1,000 — never start work on full Net 30. 3. Add explicit late fees — 1.5% per month is industry standard. 4. Use invoice software that auto-sends reminders (FreshBooks, Wave, Stripe). 5. For government/enterprise clients — accept Net 60-90 only if the contract is large enough to justify the cash flow hit.

Important: Net 30 is calculated from the invoice date, not the delivery date or signed contract date. Always send invoices the moment work is complete to start the clock.

Generate contracts with explicit payment terms, late fees, and deposit requirements at icontract.pro.

Create your own contract in 2 minutes

iContract drafts a custom, legally sound agreement for free. Start drafting →