Net 30 (Payment Terms)
Definition
Payment terms that give the buyer 30 days from the invoice date to pay. Net 60 and Net 90 work the same way with longer windows.
Want a deeper explanation?
Terms work in both directions. Longer terms from suppliers help your cash; longer terms to retailers hurt it. Many brands negotiate one without thinking about the other.
An early-pay discount like 2/10 Net 30 is worth about 37% a year, so it is usually worth taking if you have the cash. Watch for: giving retailers Net 60 while paying suppliers upfront, which can starve a growing business of cash.
Example
Terms of "2/10 Net 30" mean the full amount is due in 30 days, but you can take a 2% discount if you pay within 10.