Payment Terms
Net 15 vs Net 30 vs Net 60: Which Should You Use?
Short answer
Net 15 is best for small service jobs and freelancers. Net 30 is the B2B default and what most accounting departments expect. Net 60+ is only appropriate for large enterprise customers with strong credit — and only when you can absorb the cash-flow hit.
'Net X' on an invoice means payment is due X calendar days after the invoice date. Picking the right Net term is one of the most under-discussed levers in a small service business, because it directly determines how long your money sits in someone else's bank account before it sits in yours.
What each Net term actually means
Net terms are calendar days from the invoice date — not from the date the customer receives the invoice, not from the date the work was completed, and not from the date the customer approves it. If your invoice is dated June 1 with Net 30 terms, payment is due July 1. (Some industries date from end-of-month — write it out explicitly to avoid arguments.)
| Term | Best for |
|---|---|
| Due on receipt | Cash customers, residential service calls, small one-off jobs |
| Net 7 / Net 10 | Freelance creative, small repairs, recurring weekly services |
| Net 15 | Most small B2C and B2B service jobs under $5,000 |
| Net 30 | Standard B2B default; expected by most AP departments |
| Net 45 / Net 60 | Large enterprise customers, government, or strategic accounts only |
| 2/10 Net 30 | Net 30 with a 2% early-pay discount if paid within 10 days |
The hidden cost of long net terms
Every day between work-done and money-received is a day you are financing your customer's business with your own working capital. A $10,000 Net 60 invoice ties up $10,000 of your money for two months — at a 10% cost of capital, that is roughly $165 in real cost. Multiply by every invoice and the math gets serious quickly.
Many small businesses agree to Net 60 because a big customer asked, never realizing that the long terms are the actual price they negotiated. Before saying yes, calculate whether the deal still pencils out at 60 days.
When to use early-payment discounts
A '2/10 Net 30' term offers a 2% discount if the customer pays within 10 days. That works out to an effective annual interest rate of roughly 36% — generous to the customer, expensive to you. Use early-payment discounts when your cost of capital is high (you would otherwise need a line of credit) and your gross margin can absorb the 2%.
For most small service businesses with healthy cash flow, simply offering a payment link inside the invoice and accepting cards beats early-payment discounts on both speed and cost.
Frequently asked questions
Does Net 30 mean 30 business days or 30 calendar days?
Calendar days. If you mean business days, write 'Net 30 business days' explicitly — but it is non-standard and many AP departments will pay on the calendar-day interpretation anyway.
Can I change a customer's payment terms?
Yes, on future invoices. You cannot retroactively shorten terms on an invoice that has already been issued. Communicate the change in writing before the next invoice goes out.
What is the most common payment term?
Net 30 is the dominant default in U.S. B2B billing. Net 15 is rising in popularity for small service businesses, and Due on Receipt remains standard for B2C residential service calls.
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Sources & further reading
Primary sources we consulted when writing and reviewing this guide.