What Are Net 30 Payment Terms?
Net 30 is one of the most common invoice payment terms, requiring customers to pay within 30 days of the invoice date. These terms are widely used in B2B transactions and appear on invoices as:
“Net 30”
“Net 30 Days”
“Payment due in 30 days”
Key Features of Net 30 Terms:
- Standard credit period for many industries
- Helps manage cash flow for both buyers and sellers
- Often paired with early payment discounts
- Typically begins on invoice date (not delivery date)
How Net 30 Terms Work?
When to Use Net 30 Terms:
For trusted, established customers
When your cash flow can support 30-day delays
For standard B2B transactions
When industry norms require it
Net 30 vs Other Common Payment Terms
| Term | Meaning | Best For |
|---|---|---|
| Net 10 | Payment in 10 days | Quick-turn projects |
| Net 15 | Payment in 15 days | Freelancers/small biz |
| Net 30 | Payment in 30 days | Standard B2B |
| Net 60 | Payment in 60 days | Large orders |
| Due on Receipt | Immediate payment | One-time clients |
Advantages of Net 30 Terms
For Sellers:
- Builds stronger client relationships
- Competitive with industry standards
- More attractive than COD terms
For Buyers:
- Improves cash flow management
- Allows time to inspect goods/services
- Standard in most B2B transactions
Potential Drawbacks
For Sellers:
- Slows cash inflow by 30 days
- Risk of late/non-payment
- Requires strong AR management
For Buyers:
- May miss early payment discounts
- Can lead to overspending
- Requires careful cash flow planning
Implementing Lockbox: What to Expect
Setup Process:
Bank Selection: Compare fees and features
PO Box Setup: Establish dedicated mailing address
Customer Notification: Update billing documents
System Integration: Connect to accounting software
Testing: Process sample payments
Typical Pricing Structure:
Monthly fee: 25−100
Per-item fee: 0.30−1.50
Scanning fee: 0.10−0.50 per page
Implementation: 500−2,000 one-time
How to Implement Net 30 Terms Effectively
Best Practices for Sellers:
Run credit checks on new customers
Clearly state terms on all invoices
Offer early payment discounts (e.g., 2/10 Net 30)
Automate payment reminders
Enforce late fees consistently
Template for Invoice Terms:
“Payment terms: Net 30. Payment due 30 days from invoice date. Late payments subject to 1.5% monthly interest.”
FAQs
Yes, unless specified otherwise. Some businesses use "30 business days" instead.
Yes, but:
Give 30-60 days notice
Explain the change professionally
Offer to grandfather existing clients
Industry averages:
Good payers: 80-90% on time
Average: 60-70% on time
Poor: Below 50% on time
Offer 2/10 Net 30 discounts
Send automated reminders
Accept multiple payment methods
Build relationships with AP staff
