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Glossary

What does net 45 mean?

Net 45 is a payment term meaning the buyer must pay the full invoice amount within 45 days of the invoice date, after which late payment penalties may apply.

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How net 45 works

The supplier issues an invoice, and the clock starts on the invoice date unless the contract says otherwise. The buyer has 45 calendar days to pay in full. Payment terms vary by industry, product and relationship, and net 45 sits between the common net 30 and the longer net 90. Some suppliers offer an early payment discount, written for example as 2/10 net 45, meaning a discount for paying within 10 days.

Who uses it and why

Net 45 is common in business to business trade, from manufacturing to professional services. For the buyer it adds working capital time. For the supplier it is a longer wait for cash, which small suppliers feel more. If payment is late, the contract may allow late fees, interest or a hold on further orders.

How Aavenir handles it

Invoiceflow checks each invoice against the payment terms and discounts in the signed contract, so the due date and any early payment discount are right. Where a supplier's invoice terms differ from the contract, the exception goes to a person.

Keep reading

Net 90 Net 90 is a payment term giving the buyer 90 days from the invoice date to pay in full, sometimes with a discount offered for paying earlier.Read more Accounts payable Accounts payable is the money a business owes suppliers for goods and services received but not yet paid, shown as a liability, and the team that pays it.Read more Invoice approval Invoice approval is reviewing and authorizing a supplier invoice before it is recorded and paid, to confirm the goods or services arrived at the agreed price.Read more

Frequently asked questions (FAQ)

Common questions

Does net 45 mean 45 business days?

Usually no. Net 45 means 45 calendar days from the invoice date, unless the contract defines the start date or business days differently. Check the contract wording. Read about net 90.

What is 2/10 net 45?

The buyer may take a discount, here two percent, by paying within 10 days. Otherwise the full amount is due within 45 days. The contract should state the discount and when it applies. See Invoiceflow.

What happens if a net 45 invoice is paid late?

The supplier may charge late fees or interest if the contract allows, put orders on hold or tighten terms. Late payment also damages the relationship and the buyer's position at renewal. Read about accounts payable.

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