Proposals · Glossary
What does net 30 mean on an invoice?
Net 30 means the full amount of an invoice is due within 30 days of the invoice date. Net 7, net 14 and net 60 work the same way with different periods. Variants such as 2/10 net 30 offer a 2 percent discount if the buyer pays within 10 days, with the full amount due by day 30.
Net terms are shorthand that business buyers understand at a glance, but the details hide in what counts as day one and what happens on day thirty one. Writing them clearly is half of getting paid on time.
Nuwan Madhusanka · Co-founder
4 min read · Published
How net terms are counted
Net 30 normally counts 30 calendar days from the invoice date, not the delivery date or the day the buyer opened the email. Some buyers read it differently, for example from receipt of the invoice or from the end of the month, so the safest invoice prints the actual due date as well as the term. End of month terms such as 30 days EOM mean payment is due 30 days after the end of the month the invoice was issued in, which can stretch to nearly two months.
Common variants
Net 7 and net 14 are common for small businesses and services; net 30 is the usual default between larger businesses; net 60 or more is often demanded by big corporate buyers. Early payment discounts are written as 2/10 net 30, meaning 2 percent off if paid within 10 days, otherwise the full amount by day 30. Due on receipt means payment is expected immediately. The Australian Government's Payment Times Reporting Scheme requires large businesses to publish how quickly they pay small business suppliers, which has put pressure on very long terms.
Choosing your terms
Shorter terms improve cash flow but can deter large buyers whose accounts systems run monthly. A practical approach is to use 7 or 14 days by default, accept 30 days for established business clients, and ask for a deposit on large jobs so the term only applies to the balance. Whatever you choose, put it in the quote or proposal before the work starts, because terms that first appear on the invoice may not be part of the agreement.
Common mistakes
Writing net 30 without a date leaves room to argue about the start. Changing terms on the invoice without agreeing them first is unenforceable in many cases. Offering an early payment discount without checking that the margin can absorb it erodes profit. And not following up on day 31 teaches buyers that the term is a suggestion. A reminder schedule tied to the due date is the cure.
Where it shows up in the product
Invoices carry a due date. When a proposal without a deposit is accepted, one issued invoice is created due in 14 days; with a deposit, the deposit invoice is due that day and a draft balance invoice follows. An invoice turns overdue the day after its due date. Reminder presets run around the due date: gentle sends on the due day and 7 days after; standard sends 3 days before, on the due day, and 3, 7 and 14 days after; firm adds more late reminders.
Questions people ask
Does net 30 include weekends?
Yes, unless the terms say business days. Net terms are normally counted in calendar days. If day 30 falls on a weekend or public holiday, many buyers pay on the next business day, so state the actual due date on the invoice to avoid any doubt about when payment is late.
What does 2/10 net 30 mean?
The buyer may take a 2 percent discount if they pay within 10 days of the invoice date; otherwise the full amount is due within 30 days. It rewards early payment. Annualised, giving up a 2 percent discount to pay 20 days later is expensive for the buyer, which is why the offer often works, but check your margin first.
Is net 30 the same as 30 days EOM?
No. Net 30 counts 30 days from the invoice date. 30 days EOM counts 30 days from the end of the month in which the invoice was issued. An invoice dated 2 March is due on 1 April under net 30 but on 30 April under 30 days EOM, a big difference for cash flow.
Can I charge interest after net 30 passes?
You can if the agreement allows it. Interest or late fees must be agreed before the work, usually in the quote or contract terms, and should be reasonable. In Australia an excessive late fee can be challenged as a penalty or as an unfair contract term. Many small businesses rely on reminders and only use interest for persistent late payers.
What payment terms should a small business use?
Seven or fourteen days is common for small business to consumer work and for small jobs, with thirty days for established business clients. Pair the term with a deposit on large jobs and easy payment options such as a card pay link. The best term is the shortest one your clients will reliably meet.
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