Payment terms net 30
What does Net 30 mean on an invoice?
If you see 'net 30' on an invoice, you’re expected to pay the total amount within 30 days from the invoice date. The term 'net' here just means the whole balance is due, not counting any discounts, unless an early payment discount is written on the invoice. There are other codes too. Net 60 allows for 60 days, Net 90 means you have 90 days.
Terms like this set a target for payment, but there’s no automatic guarantee the deadline is met. Clients sometimes count from another date, like when goods arrive instead of when the invoice was sent. Make the number of days and the start date clear to avoid arguments later.
Common payment term codes compared
- Due on receipt: You should pay as soon as you get the invoice.
- Net 30, Net 60, Net 90: The payment is counted from the invoice date and must be settled in 30, 60 or 90 days, as stated.
- EOM (end of month): Payment is due at the end of the month the invoice was created, or a set number of days after month end, if stated.
- CIA (cash in advance): Payment comes before goods or services are delivered, so the provider doesn’t begin work (or send anything) before your funds arrive.
Giving a longer time frame means your buyer can hold onto their money longer, which is why some clients push for it. If you need tighter control, especially with first-time clients, asking for payment up front or soon after the invoice lowers your risk. If you need a broader view of payment types, read about trade payment methods.
How to choose terms that suit a foreign client
The best terms fit your own cash flow situation and your client's expectations. Large purchasers often expect a longer time to pay. For a new client or someone overseas with no payment history, you might want a shorter term, or payment in advance if there’s any doubt.
You also need to account for differences in banking systems. Transfers between countries can add extra days before the funds arrive, so what looks like 30 days on paper might end up longer for you in reality. There’s a detailed piece on late payment from foreign clients if you find your agreed date has slipped by.
Frequently asked questions
What is the difference between Net 30 and EOM?
Net 30 means payment is due 30 days from the invoice date. With EOM (end of month), the due date is set at the end of the month the invoice was issued, or after a number of days past that month’s end if this is stated. The result can be similar, but a late-month invoice will give different deadlines under each.
Are payment terms legally binding?
Yes, terms are binding as soon as both sides clearly accept them, either within the contract or clearly stated on the invoice. Each country may set different rules on what happens if a payment is missed, and how late payment interest works. Always check your own contract and the law that governs it, or speak to a legal professional before assuming a term can be enforced as written.