Net Payment Terms (Net 15, 30, 45, 60)

What 'net 30' actually means

'Net 30' means the full invoice amount is due 30 days from the invoice date (some contracts specify 'from receipt' or 'from end of month' — clarify in writing). Net 15 is shorter and tighter; net 45/60 is longer and more enterprise-friendly.

Each additional 15 days of terms ties up roughly 4% of annual revenue in additional receivables. A business with \$1M revenue moving from net 15 to net 60 (3 buckets longer) ties up about \$120K of working capital it didn't need to before.

Choosing the right default

Net 15 is appropriate for small or solopreneur clients who don't have a formal AP process — they pay quickly anyway, and the short term sets expectations.

Net 30 is the most common B2B default. Net 45/60 is common for enterprise customers (Fortune 1000 accounts payable departments often refuse anything shorter, regardless of what the contract says). If you sell to enterprise, build the working-capital cost into your pricing — a 60-day customer should be priced ~5% higher than a 15-day customer with everything else equal.

Aligning terms to industry and customer

Different industries have different baseline expectations. SaaS and professional services typically run net-15 or net-30. Government and large enterprise often demand net-45 or net-60 and will not negotiate. Construction subcontractors are commonly held to pay-when-paid clauses that effectively extend terms to net-90 or longer. Understanding the baseline matters more than fighting it.

Where you can move terms is in trade-offs. Customers who insist on net-60 will often accept a 1-2% surcharge for the privilege, or accept net-15 in exchange for a small discount. Making the cost of slow payment visible turns the conversation from 'these are our terms' to 'what speed do you want to pay for' — and surprisingly often the customer chooses the faster option.

Document the agreed terms on every invoice, including the due date in plain English ('Payment due by 15 May 2026'), not just 'net-30'. AP systems sometimes calculate due dates from invoice date, sometimes from receipt date, sometimes from approval date; making the date explicit removes the ambiguity that causes most 'we thought it wasn't due yet' disputes.

Long net terms compound across the supply chain. If you take net-60 from your customer and your subcontractor expects net-30 from you, you're funding a 30-day gap on every project. Awareness of the term mismatch lets you either negotiate longer subcontractor terms, negotiate shorter customer terms, or price the financing cost into the bid. The worst outcome is to discover the gap at the moment cash runs short.