Net 30

Net 30 means the invoice is due 30 days from the date it was issued. Plain-English guide to net 30, when it makes sense, and why a calendar date works better.

How Net 30 works in practice

The 30-day clock starts the day the invoice is issued (the invoice date), not the day the work was finished. That detail matters. If you finish work on April 1 and do not send the invoice until April 25, the client has until May 25 to pay, not May 1.

Some industries start the clock differently:

  • Net 30 from receipt: the 30 days starts when the client receives the invoice, not when you sent it. Used when paper invoices are mailed.
  • Net 30 from delivery: 30 days from when the goods or service were delivered. Common in product sales.
  • Net 30 EOM (End of Month): 30 days from the end of the month the invoice was issued. An April 15 invoice with Net 30 EOM is due May 30.

If you do not specify, Net 30 defaults to 30 days from the invoice date. Write the exact due date on every invoice. "Due June 10, 2026" gets paid faster than "Net 30".

When Net 30 makes sense

Net 30 fits if any of these are true:

  • Your clients are mid-size to large businesses with formal accounts payable processes (they pay weekly or biweekly batches and need the lead time)
  • You have an established relationship with the client and trust them
  • Your work is high-ticket enough that no single delayed invoice cripples your cash flow
  • Your competitors all offer Net 30 and you would lose work by demanding faster

Net 30 does not fit if any of these are true:

  • The client is a one-time or new buyer
  • The amount is small (under a few hundred dollars) where the 30 day delay does not justify the credit risk
  • You are paying for materials out of pocket and need the cash to float the next job
  • The work has just been completed and the client has not signaled any issue (so why wait?)

For most one-person contractors, Due on Receipt or Net 7 makes more financial sense than Net 30 because you cannot afford to be a free lender to your clients.

Net 30 variants and faster-payment incentives

The classic incentive structure is "2/10 Net 30". Read it as "2% discount if paid within 10 days, otherwise net 30". On a $5,000 invoice, that is a $100 discount for paying 20 days early. Big businesses with cash on hand love this because the implied annual interest rate of taking the discount (37% APR) is higher than they earn on their cash. It is a real lever to pull on slow-paying clients.

Other variants:

  • Net 15: balance due in 15 days. Common for service businesses.
  • Net 45 / Net 60 / Net 90: longer terms typical in manufacturing and construction.
  • Due on Receipt: balance due as soon as the invoice arrives. The cash-flow winner for small contractors.
  • CIA (Cash in Advance): payment before work starts. Common for first-time clients and large jobs.
  • COD (Cash on Delivery): payment due at delivery.
  • Net 30 with late fees: "Net 30. A late fee of 1.5% per month applies on balances over 30 days." This is enforceable in most US states.

Late fees on Net 30 invoices

A late fee clause typically reads: "Past due balances are subject to a 1.5% monthly finance charge (18% APR)." That rate is below most state usury caps for commercial transactions. The fee has to be in your written agreement or stated on the invoice before the work is done, not added retroactively.

In practice, the threat of a late fee gets paid more often than the fee itself. Send a polite reminder at day 15, a firmer one at day 30 with the late fee notice, and escalate to phone calls at day 45.

Common questions

When does Net 30 start counting?

Net 30 starts counting from the invoice date, unless the invoice specifies "Net 30 from receipt" or "Net 30 from delivery". The invoice date is the date you put in the "Date" field at the top of the invoice. The clock does not start from the work completion date.

Is Net 30 the same as 30 days?

Effectively yes, with one wrinkle. Net 30 means 30 calendar days from the invoice date, not 30 business days. Weekends and holidays count. June 10 is 30 days after May 11 even if June 10 is a Sunday. Most businesses treat the next business day as the due date if the calendar due date falls on a weekend.

Can I charge interest on overdue Net 30 invoices?

Yes, if your contract or invoice states the late fee terms before the work begins. The most common late fee is 1.5% per month (about 18% APR). Most US states allow up to 1.5% to 2% per month on commercial transactions. Check your state's usury law before charging higher rates, especially when invoicing consumers (lower caps).

What is the difference between Net 30 and Net 30 EOM?

Net 30 means 30 days from the invoice date. Net 30 EOM ("end of month") means 30 days from the last day of the month the invoice was issued. A May 5 invoice with Net 30 is due June 4. The same invoice with Net 30 EOM is due June 30. EOM terms give the client a longer runway, which buyers like and sellers usually do not.

Related terms and guides