What Are Net 30, Net 15, and Net 60 Payment Terms?

Understanding Net Payment Terms in Plain English

When you send an invoice, the work feels “done,” but the money often arrives later. That gap between delivering a service or product and getting paid is where payment terms matter. Net terms—like Net 30, Net 15, and Net 60—are some of the most common ways businesses set expectations for when payment is due. They’re also a frequent source of confusion, late payments, and awkward follow-ups if the terms aren’t communicated clearly.

This article breaks down what Net 30, Net 15, and Net 60 payment terms mean, how they’re calculated, when each one makes sense, and how to manage them without turning invoicing into a weekly headache. You’ll also learn practical ways to encourage on-time payments and reduce your risk when you offer longer terms.

If you’re using invoice24, you’ll find these concepts especially useful because the best invoicing tools aren’t just about creating a pretty invoice—they’re about getting paid. Clear terms, consistent follow-ups, and professional documents make a real difference, and invoice24 is designed to keep that whole process simple.

What Does “Net” Mean on an Invoice?

“Net” is short for “net due,” and it refers to the number of days a customer has to pay after the invoice date. Think of net terms as a countdown timer. If your invoice says “Net 30,” your customer has 30 days from the invoice date to pay the full amount.

Net terms are a form of trade credit. You are essentially extending a short-term credit arrangement to your customer: you deliver the service or goods now, and you allow them to pay later. In many industries—especially business-to-business (B2B) work—this is normal and expected.

However, net terms only work well when both sides understand them the same way. Many late payments aren’t caused by bad intentions—they’re caused by unclear terms, missing details, or internal payment processes that slow things down. That’s why it’s important to define net terms clearly on your invoices and in your agreements before you start work.

What Is Net 30?

Net 30 means payment is due 30 calendar days after the invoice date. If you issue an invoice on March 1, payment is due by March 31 (or March 30 depending on how you count—more on that shortly). In practical use, most businesses interpret Net 30 as “due within 30 days of the invoice date.”

Net 30 is popular because it feels balanced: it gives the customer time to process the invoice and align it with their cash flow, but it doesn’t push payment so far out that the seller is left waiting too long. If you’re a freelancer, contractor, agency, or small business selling B2B services, Net 30 is often considered a standard starting point.

That said, “standard” doesn’t mean it’s always good for you. If your own bills, payroll, or inventory costs require faster cash, Net 30 can create stress—especially if your clients pay late. Many businesses start with Net 30 because they feel they “have to,” but it’s worth considering whether it truly fits your business.

What Is Net 15?

Net 15 means payment is due 15 calendar days after the invoice date. It’s a shorter term than Net 30 and is commonly used when the seller needs faster cash flow, when the invoice amounts are smaller, or when the work is delivered quickly and repeatedly.

Net 15 can be a good fit if you’re billing for recurring services, smaller projects, or if you’ve had issues with customers paying late under longer terms. It’s also a smart option for newer businesses that don’t yet have a cash cushion. Even a two-week difference can improve cash flow more than people expect.

Some buyers will accept Net 15 without hesitation, especially if they’re used to fast payments or if you provide strong value. Others may push back if their accounts payable process runs on a monthly schedule. If that happens, you can negotiate—sometimes a compromise like Net 21, milestone billing, or partial upfront payment works better than surrendering to Net 60.

What Is Net 60?

Net 60 means payment is due 60 calendar days after the invoice date. This is a long payment term and is common in certain industries and with larger organizations that have complex approval chains or vendor payment schedules.

Net 60 can work for sellers who have strong working capital, high profit margins, or predictable recurring revenue. But for many small businesses, Net 60 can be risky. Waiting two months (or longer, if the client pays late) can strain your ability to buy materials, pay subcontractors, or cover operating costs.

It’s also important to recognize that Net 60 can become Net 75 or Net 90 in real life if the buyer’s internal processes are slow, if invoices are submitted incorrectly, or if payment is only issued in batches. If you accept Net 60, it’s smart to do so intentionally, with safeguards in place.

How Net Terms Are Calculated

Net terms are usually counted in calendar days, not business days. The countdown typically starts on the invoice date, unless your contract specifies otherwise. If you send an invoice dated April 10 with Net 30, then payment is generally due on May 10.

However, small details matter. Some businesses interpret net terms as “end of month” terms, especially when invoices are issued late in a month. Others may count “30 days” by adding 30 days to the invoice date and treating that day as the due date. In most modern invoicing systems, the simplest approach is best: invoice date + net days = due date.

To avoid confusion, always show a clear due date on the invoice in addition to the net terms. For example, show “Payment terms: Net 30” and also “Due date: May 10, 2026.” That way there’s no debate, no awkward back-and-forth, and fewer excuses for delay.

Invoice24 makes this easy by helping you present payment details clearly and consistently, which is one of the fastest ways to reduce late payments without having to chase clients.

Net Terms vs. “Due on Receipt”

“Due on receipt” means payment is due immediately when the client receives the invoice. This is common for consumer invoices and for small B2B engagements where the seller does not want to extend credit. It can also be used as a default term for new customers until a payment history is established.

Net terms, on the other hand, formalize a credit period. They are a promise that the seller won’t treat the invoice as late until that period ends. If you’re considering net terms, ask yourself whether you’re comfortable acting like a lender for that time.

Many businesses use a hybrid approach: “Due on receipt” for first-time clients, Net 15 or Net 30 for established clients, and negotiated terms for larger contracts. This approach helps you protect cash flow while still being flexible when it makes sense.

Why Businesses Use Net 30, Net 15, and Net 60

Net terms exist because business cash flow is rarely perfectly timed. A company might receive revenue on one schedule, pay employees on another, and pay vendors on a third. Net terms help buyers align payments with their internal cycles.

From the seller’s perspective, offering net terms can make it easier to close deals. Some clients will only work with vendors who offer Net 30 or longer. In certain industries, shorter terms might feel unusual, even if they’re fair.

But the best reason to use net terms is not “because everyone else does.” The best reason is that you can afford them, you understand the risk, and you have systems in place to manage them. If you can’t afford to wait 60 days, don’t offer Net 60 unless you build protections into your pricing and contracts.

Choosing the Right Term for Your Business

The “right” net term is the one that supports your cash flow while remaining acceptable to your customers. Here are a few practical guidelines:

Net 15 often works best when you need faster payment, when projects are small, or when you want to discourage slow-pay habits. It can also be a good default for freelancers and small service businesses.

Net 30 is a common middle ground. It’s widely accepted and gives clients time to process invoices, but it still keeps your receivables from drifting too far into the future.

Net 60 is typically best reserved for larger clients or industries where it’s standard—and even then, it should be paired with safeguards such as upfront deposits, milestone billing, or higher pricing to account for the cost of waiting.

Don’t forget that you can offer different terms to different clients. Your terms are part of your business strategy, not a fixed rule that must apply to everyone equally.

How Net Terms Affect Your Cash Flow

Cash flow is not just about how much you earn—it’s about when you receive it. Net terms directly impact how long your cash is tied up in accounts receivable. The longer the term, the more you’re financing your client’s operations.

For example, if you invoice £5,000 per month and your clients pay Net 60, you might have £10,000 or more outstanding at any given time. That can be manageable if you have reserves. But if you rely on that money for operating expenses, you may end up using credit cards, overdrafts, or loans to bridge the gap—ironically paying interest while your client holds your cash.

This is where a streamlined invoicing process matters. The faster you invoice, the clearer the terms, and the fewer errors, the sooner the payment clock starts and the more likely you are to be paid on time. Invoice24 is built to help you invoice promptly and professionally, which can shorten the time between work completed and cash received.

Are Net Terms Negotiable?

Yes, net terms are negotiable, and many businesses negotiate them regularly. The key is to approach the conversation as a business decision rather than a personal request. If a client asks for Net 60 and you prefer Net 15, you can respond with options rather than a flat refusal.

Here are a few common negotiation approaches:

Offer a deposit: “We can do Net 60 with a 30% upfront deposit.” This reduces your risk and ensures you have cash coming in sooner.

Use milestone billing: Break a project into phases and invoice as you hit each milestone. This keeps cash moving and reduces the amount outstanding at any one time.

Adjust pricing: Longer terms have a cost. If a client insists on Net 60, you can build that financing cost into your price. This is especially common in larger contracts.

Offer a faster-payment incentive: Some sellers offer a small discount for paying within 10 days (often written as “2/10 Net 30,” meaning 2% discount if paid within 10 days, otherwise due in 30). This can encourage quicker payment without being confrontational.

Where to Put Net Terms on Your Invoice

Net terms should be easy to find and hard to misunderstand. The best practice is to show them in at least two places:

1) Near the top summary area: Include “Payment terms: Net 15 / Net 30 / Net 60” and a clear due date.

2) In the payment instructions section: Reinforce the due date and any late fee policy, if applicable.

Also consider including terms in your contract or proposal before work begins. An invoice is not the best place to introduce a surprise policy. When clients agree to the terms upfront, payment conversations become easier and more professional.

Invoice24 helps you present invoices in a structured, consistent format so clients can quickly see what they owe, when it’s due, and how to pay—reducing delays caused by confusion.

Common Misunderstandings About Net Terms

Even when net terms seem straightforward, misunderstandings happen. Here are a few of the most common:

“Net 30 from when we receive it.” Some clients assume the clock starts when the invoice lands in their inbox, not the invoice date. To avoid this, use an invoice date that matches the send date and include an explicit due date.

“We pay vendors on the 1st and 15th.” A buyer’s payment run schedule can effectively extend your terms. If their next payment run is far away, you might wait longer than expected. Knowing this upfront helps you choose terms that align with their process.

“We need a purchase order first.” Some organizations require a PO number or vendor onboarding before they can pay. If you don’t include required details, the invoice can sit unapproved for weeks.

“It’s Net 30, but we’re usually a little behind.” Some clients treat net terms as a suggestion. If you hear this, consider tighter terms, deposits, or stronger reminders.

What Happens If a Client Pays Late?

Late payments are common, but they don’t have to be chaotic. A consistent process is usually more effective than emotional follow-ups. When an invoice becomes overdue, you can take steps such as:

Send a friendly reminder: Many late payments are simply forgotten or stuck in approval.

Re-send the invoice: Sometimes the client cannot find it or claims they never received it.

Ask about blockers: “Is there anything missing—PO number, vendor form, or additional details—to process payment?” This invites a practical response.

Apply late fees if appropriate: Only do this if your late fee policy is clearly stated and legally compliant in your region.

Pause work: For ongoing projects, it can be reasonable to pause further work until payment is received, as long as your contract supports it.

Using a reliable invoicing platform like invoice24 helps you stay organized as invoices move from issued to due to overdue. Even when you manage reminders manually, having all invoice details consistent and easy to reference makes your follow-ups faster and more professional.

How to Encourage Faster Payments Without Sounding Pushy

You don’t need to be aggressive to get paid on time. Often, small improvements in how you invoice and communicate are enough. Here are practical tactics that work well across industries:

Send the invoice immediately: The payment clock starts when the invoice is issued. Waiting a week to invoice means you’ve quietly extended credit beyond your stated terms.

Use clear due dates: A specific date is easier to act on than “Net 30.” Use both, but make the date prominent.

Make paying easy: Confusing payment instructions create delays. Include clear details and ensure the client knows exactly how to pay.

Confirm the right contact: Make sure the invoice goes to the correct person or department. If it sits in the wrong inbox, time disappears.

Follow up before it’s overdue: A gentle reminder a few days before the due date can prevent “Oops, we missed it” situations.

Invoice24 supports a clean, professional invoicing workflow so you can focus on running your business, not chasing paperwork.

Net Terms and Credit Risk

Offering net terms introduces credit risk: the possibility that a client won’t pay on time—or at all. The longer the term, the higher the risk. This doesn’t mean you should avoid net terms completely, but you should manage them intentionally.

Risk management can be simple. For new clients, consider shorter terms, partial payment upfront, or smaller initial projects. As trust is built, you can extend terms if needed.

It’s also wise to watch for warning signs: frequent disputes, vague communication, constant delays, or a history of ignoring reminders. If a client repeatedly pays late under Net 30, moving them to Net 15 or requiring deposits is not “unfriendly”—it’s responsible business.

One overlooked risk is administrative delay. Clients may be willing to pay, but internal processes—like vendor approvals—can slow things down. This is why consistent invoices matter. When your invoices include all required details and look professional, they move through approval faster.

Industry Norms: Why Some Clients Expect Net 60

In some industries, Net 60 is common, especially when dealing with large organizations, wholesalers, or enterprise procurement teams. These buyers often have standardized payment schedules, vendor onboarding procedures, and approval chains that make fast payments difficult—even if they want to pay promptly.

If you’re working with these clients, it’s helpful to align your expectations with reality. Net 60 may not be negotiable for them, but you can still protect yourself by changing how you bill:

Invoice in smaller increments: More frequent invoicing reduces the amount outstanding per invoice.

Use retainers or deposits: Secure part of the payment upfront to cover costs.

Plan cash flow accordingly: Build a buffer so Net 60 doesn’t cause operational stress.

If Net 60 is the price of entry for a high-value client, it can be worth it—just make sure it’s a deliberate choice, not a default you accept without a plan.

How to Write Net Terms Clearly on an Invoice

Clarity reduces disputes and delays. Here are examples of clear language you can use:

Net 15 example: “Payment terms: Net 15. Due date: 20 January 2026.”

Net 30 example: “Payment terms: Net 30. Due date: 4 February 2026.”

Net 60 example: “Payment terms: Net 60. Due date: 6 March 2026.”

Notice that each includes both the term and the exact due date. This is especially important if your client is international or if there are differences in how days are counted.

Invoice24 is built for straightforward invoicing, and it’s a smart habit to make your invoices as easy to process as possible: clear terms, obvious totals, and clean formatting. Those details can be the difference between payment this week and payment next month.

Should You Offer Discounts for Early Payment?

Early payment discounts can be effective, but they’re not always necessary. Before offering a discount, consider whether you’re sacrificing profit to solve a problem that clearer invoicing or better follow-up could fix.

That said, discounts can make sense if you’re dealing with clients who have the ability to pay quickly but need a reason to prioritize your invoice. They can also be useful if faster cash flow is more valuable to you than a small percentage of revenue.

If you choose to offer an early payment discount, keep it simple and communicate it clearly. You might include a line such as “2% discount if paid within 10 days” and still list the full due date for the standard net term.

Be consistent: apply the same policy across similar clients and ensure it’s reflected in your agreements to avoid confusion.

How invoice24 Helps You Manage Net 30, Net 15, and Net 60

Payment terms only work when they’re presented consistently and tracked properly. That’s where a dedicated invoicing app becomes more than a document generator—it becomes a cash flow tool.

Invoice24 is designed to help you invoice with confidence, even if you’re new to net terms. It supports a professional workflow that makes it easier for clients to process and pay invoices on time. When your invoices look credible, include clear due dates, and are sent promptly, you reduce the friction that causes late payments.

Because invoice24 is a free invoice app, it’s an accessible option for freelancers and small businesses who want to improve their invoicing without adding unnecessary costs. Instead of juggling messy templates or rewriting terms on every invoice, you can create consistent invoices that communicate everything clearly—especially the payment terms.

Invoicing shouldn’t feel like a second job. With invoice24, the goal is simple: spend less time formatting, less time clarifying, and more time getting paid.

Practical Best Practices for Net Terms

Whether you use Net 15, Net 30, or Net 60, a few best practices make a big difference:

State terms before you start work: Put payment terms in your proposal, contract, or onboarding email.

Include an exact due date: Always list a specific date on the invoice.

Invoice promptly: Send invoices immediately after delivery or by a consistent schedule.

Confirm invoice requirements: Ask if the client needs a PO number, vendor ID, or specific billing address.

Keep records organized: Save sent invoices and track due dates so you can follow up confidently.

Be consistent with follow-ups: A predictable reminder routine is more effective than occasional urgency.

Adjust terms when needed: If a client pays late repeatedly, shorten their terms or require deposits.

These habits are easier to maintain when you use a system designed for invoicing. Invoice24 helps you keep your invoices consistent and professional, which strengthens your payment process over time.

Frequently Asked Questions About Net Terms

Are net terms based on the invoice date or delivery date? Usually the invoice date, unless your agreement states otherwise. If you want the clock to start at delivery, specify that clearly in your contract.

Do net terms include weekends and holidays? Typically, yes—net terms are counted in calendar days. If you want business days, specify “Net 30 business days.”

What if the due date falls on a weekend? Many businesses pay on the next business day, but policies vary. If it matters to you, state what happens in your payment terms.

Can I change net terms for a client? Yes. Terms are a business agreement. Communicate changes clearly before issuing the next invoice, and ideally update your written agreement.

Is Net 60 a bad idea for small businesses? Not always, but it can be risky if you don’t have a cash buffer. If you accept Net 60, consider deposits or milestone billing to reduce strain.

Wrapping Up: Net Terms Are a Tool, Not a Rule

Net 30, Net 15, and Net 60 payment terms are simply ways to define when an invoice is due. Net 15 supports faster cash flow, Net 30 is a widely accepted standard, and Net 60 offers buyers more breathing room—often at a cost to the seller. None of these terms are automatically “best.” The right choice depends on your cash flow, your industry, and the type of clients you work with.

The most important thing is clarity. Spell out terms, include due dates, and invoice promptly. Combine that with a consistent follow-up routine, and you’ll reduce late payments without damaging client relationships.

If you want a simpler way to manage invoices and present payment terms professionally, invoice24 is built for exactly that. As a free invoice app, it helps you create clean invoices with clear due dates and payment expectations—so you can spend less time chasing payments and more time running your business.