What Net 30 means, and when it is actually due
Net 30 means the full amount is due 30 calendar days after the invoice date. Weekends and holidays count. The variations are where people get caught: EOM terms count from the end of the month, and 2/10 net 30 offers a discount for paying early. Put in the date and terms and see the exact due date.
Work out the due date
Calendar dates only, worked out in this tab. Nothing is sent anywhere.
The invoice and its terms
Net 30 in plain words
Net 30 is a payment term: the buyer has 30 days to pay the net amount, meaning the full invoice total with nothing taken off. The days are calendar days, including weekends and public holidays. Net 7, Net 15, Net 45, Net 60 and Net 90 work the same way with a different number.
The count usually starts on the invoice date. Some contracts start it on delivery or on completion of the work instead, so the contract is what decides. If your invoice says only Net 30, the client will reasonably read it from the date printed on it, which is a good reason to send invoices on the day the work is done.
Net 30 EOM and end-of-month terms
EOM means end of month, and it moves the starting line. In the usual US reading, Net 30 EOM gives the client 30 days from the last day of the month the invoice is dated in. An invoice dated 3 March is then due on 30 April, not 2 April. In the UK, net 30 end of month or net monthly is often read as the end of the month after the invoice month. Both give the client longer than plain Net 30, and they are easy to confuse, so write the actual due date on the invoice as well as the term.
2/10 net 30
2/10 net 30 means the client can take 2 per cent off if they pay within 10 days, and otherwise owes the full amount within 30. It sounds small. It is not: paying 20 days early to save 2 per cent works out to about 37 per cent a year, which is why well-run businesses take the discount and why a freelancer offering one is paying a high price for faster cash. The formula is discount ÷ (100 − discount) × 365 ÷ (net days − discount days).
Should a freelancer offer Net 30
Only if the client insists. Net 30 is common between companies, but it means you finance a month of the client's cash flow, and late payers turn it into 45 or 60 days. Shorter terms such as Net 7 or Net 15, a deposit before work starts, and a late fee agreed in the contract all cost less than a discount or factoring the invoice. When a Net 30 invoice goes past due, NETTERMS works out how late it is and writes the reminders.
Sources
Wikipedia, Net D payment terms · Stampli, 2/10 net 30 and the annualized return. Payment terms are whatever your contract says; this page explains the common readings.
Questions people ask about Net 30 payment terms
What does Net 30 mean?
The full invoice amount is due within 30 calendar days, usually counted from the invoice date. Weekends and holidays count. Net means the whole amount, with no discount taken off.
Does Net 30 mean 30 business days?
No. Net terms count calendar days, including weekends and public holidays, unless the contract says business days.
What does Net 30 EOM mean?
EOM means end of month. In the usual US reading the 30 days start from the last day of the month the invoice is dated in, so an invoice dated 3 March is due on 30 April. In the UK, end-of-month terms are often read as the end of the following month. Write the actual due date on the invoice to avoid the argument.
What does 2/10 net 30 mean?
The buyer can take 2 per cent off by paying within 10 days, otherwise the full amount is due in 30. Paying 20 days early to save 2 per cent is worth about 37 per cent a year.
When does Net 30 start counting?
Usually from the invoice date. Some contracts start the count on delivery or on completion of the work instead, so the contract decides. Sending the invoice on the day the work is done keeps the two close.