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Explanation of Payment Terms
- The phrase 30 days EOM stands for 30 days End of Month. A payment term granted as 30 day EOM has 45 days for the credit length.
- These terms refer to when payment is due. Net 30 means settling an account 30 days from the invoice date. Net 30 end of month (EOM) means payment is due 30 days after the end of the month the invoice was sent.
- For example, if invoiced on May 11th with net 30 EOM, payment is due June 30th, 30 days after May 31st.
Understanding Net 30 Terms
- Net 30 accounts allow buying now and paying later. With net 30 EOM invoiced October 13th, payment is due November 30th, 30 days after October 31st.
- EOM refers to when payment is due. With net 30 EOM invoiced on May 11th, payment is due June 30th, 30 days after May 31st.
Benefits of Using Net 30 Terms
- The main benefit is that it lets you take on more clients than you would if you instead required immediate payment for your goods and services. Offering net 30 trade credit lets you serve businesses that might not have a big pile of cash lying around, such as small businesses.
Additional Information
- What does 2/10 Net 30 Mean? As we previously mentioned, some businesses offer discounts to their clients who pay back earlier. When the buyer offers a 2% discount for clients who send payment within 10 days, it’s written in the invoice as a ‘2/10 Net 30’ payment term.
- How does 30 days EOM work? Net 30 end of the month (EOM) means that the payment is due 30 days after the end of the month in which you sent the invoice.
- Common net payment terms include net 7, net 15, net 30, net 45, and net 60. These indicate the number of days from the invoice date that payment is due. End of the month terms mean payment is due a certain number of days after the end of the month.
