What does net 30 mean on an invoice?

Net 30 is a payment term that means the full invoice amount is due 30 days after the invoice date. Net 15, net 45 and net 60 work the same way with a different number of days.

The nvisin tool built around this: Branded Invoices.

How it works

The count starts on the invoice date, not the day the client opens it. An invoice dated October 31 on net 30 terms is due on November 30. "Net" means the full amount, with no discount taken. Some invoices offer an early-payment discount, written as 2/10 net 30: the client can take 2% off if they pay within 10 days, otherwise the full amount is due in 30.

The terms should be agreed before the work starts, usually in the engagement letter or contract, and printed on every invoice next to the due date.

Worked example

TermsInvoice dateDue dateTypical use
Due on receiptOct 31Oct 31One-off jobs and new clients
Net 15Oct 31Nov 15Monthly retainers
Net 30Oct 31Nov 30Most business-to-business services
Net 60Oct 31Dec 30Large companies that set their own terms

Longer terms mean you wait longer for cash. A firm billing $40,000 a month that moves its clients from net 30 to net 15 has about $20,000 less sitting in receivables at any time, which shows up as a lower DSO.

Common mistakes

  • Writing "net 30" with no date. Print the due date as well; nobody counts days.
  • Terms only in the contract. The person paying the invoice never sees the contract.
  • Not following up on day 31. Terms only work if late invoices get a reminder. An AR aging shows which ones.
  • Making it hard to pay. A pay-online button by card or bank transfer gets more invoices paid inside the terms.

Related terms

  • Days sales outstanding (DSO): Days sales outstanding (DSO) is the average number of days it takes a business to collect payment after a sale.
  • AR aging (accounts receivable aging): An accounts receivable (AR) aging is a report that lists unpaid customer invoices grouped by how long they have been outstanding, typically current, 1 to 30, 31 to 60, 61 to 90 and over 90 days past due.

Further reading