Net 30 is an invoice term used by vendors to specify the timeframe within which they wish to be paid. It allows small businesses and freelancers to predict when they are going to get paid more accurately. In the U.S., “net 30” refers to a very common payment term. Net 30 means payment is due 30 days after the invoice date.
Understanding Net-30 Accounts
A net-30 account is a type of business line of credit. With net-30 terms, you’ll have 30 days to pay outstanding invoices without accruing interest or being charged a late payment fee. Some companies offer discounts if you pay upfront instead of net-30 terms. Offering net 30 terms can help to broaden your customer base as many customers appreciate the 30-day payment option.
Payment Timing and Considerations
When should you pay your net 30? On an invoice with net 30 terms, payment is due 30 days after the invoice date. For example, if an invoice is dated January 1 and it says “net 30,” then the payment is due on or before January 30. The disadvantage of net 30 payment terms is that you forfeit all leverage once you hand over your final deliverables. You are trusting your client to pay you.