Glossary
What does net 30 mean?
Net 30 is a payment term on an invoice that means the buyer must pay the full amount within 30 calendar days of the invoice date, a common form of short term trade credit.
How net 30 works
The vendor delivers the goods or service first and then invoices. "Net" means the full amount, and 30 is the number of calendar days, not business days, the buyer has to pay. The count usually starts from the invoice date, though some contracts start it from delivery or receipt of a correct invoice.
Variations include net 45, net 60 and net 90, and terms such as "2/10 net 30", where the buyer earns a discount for paying within 10 days.
Advantages and disadvantages
- For buyers. more time to receive and check goods and to manage cash.
- For vendors. a competitive offer that can win business, at the cost of waiting for cash.
- Risks. late payment, disputes that pause the clock, and cash flow strain on smaller vendors.
Why it matters
Payment terms are part of the price. Paying early wastes working capital, while paying late damages vendor relationships and can trigger late fees or interest under the contract. Accounts payable needs to know the term that was actually agreed, which is in the contract, not always on the invoice.
How Aavenir handles it
Invoiceflow checks each invoice against the signed contract, including payment terms and early payment discounts, and routes exceptions to a person before anything is paid. The agreed terms come from the contract record in Contractflow.
Keep reading
Net 90 Net 90 is a payment term that gives the buyer 90 calendar days from the invoice date to pay in full.Read more 
Invoice approval Invoice approval is the step where an invoice is checked and authorized for payment by the right people.Read more Purchase to pay Purchase to pay, also called procure to pay, is the process that runs from requesting a purchase through ordering...Read more Frequently asked questions (FAQ)
Common questions
Does net 30 mean 30 business days?
No. Net 30 means 30 calendar days, including weekends and holidays. If the due date falls on a non business day, many companies pay the business day before, but check the contract. Read about net 45.
When does the net 30 clock start?
Usually on the invoice date. Some contracts start it on delivery, on acceptance, or on receipt of a correct invoice. The contract wording decides, so accounts payable should follow the agreed term rather than the invoice alone. See Invoiceflow.
What does 2/10 net 30 mean?
The buyer may take a 2 percent discount by paying within 10 days, otherwise the full amount is due within 30 days. Capturing such discounts requires fast, accurate invoice approval. Read about dynamic discounting.
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