Net 30

What is Net 30?

Net 30 means a customer has 30 days from the invoice date to pay in full. This allows businesses to offer short-term credit to customers and manage cash flow for both parties. Net 30 is commonly used in B2B transactions and can sometimes include early payment discounts.

Example of Net 30 payment terms

Scenario 1: Standard Net 30

A small printing company provides marketing materials for local businesses. A restaurant orders new menus and gets an invoice marked “Net 30” on March 1st. This means the restaurant has until March 31st to pay in full, giving them time to generate revenue from the menus before paying the bill.

Scenario 2: Net 30 with Early Payment Discount

A wholesale coffee supplier offers its café customers Net 30 terms but includes a “2/10 Net 30” option. This means:

• If the café pays within 10 days, they get a 2% discount on the total invoice.
• They owe the full amount if they pay between Day 11 and Day 30.

For example, if the café’s invoice is $5,000, they can:

• Pay $4,900 by Day 10 (save $100).
• Pay $5,000 by Day 30.

The option to pay early and at a discount is a win-win. Just be careful not to stretch your money too thin. Having a percentage of cash on hand for unexpected expenses is always a good rule of thumb.

Why do businesses use Net 30?

For buyers, Net 30 gives them flexibility to manage cash flow without immediate financial strain. For sellers, it helps build long-term customer relationships and a structured payment schedule. However, offering Net 30 requires trust—late payments can disrupt cash flow, so businesses must carefully track outstanding invoices.

Net 30 is more than just a payment term—it’s a strategic tool that balances financial stability with business relationships.