Net D

Net 10, Net 15, Net 30 and Net 60 are forms of trade credit which specify that the net amount (the total outstanding on the invoice) is expected to be payment received in full 10, 15, 30 or 60 days after the goods are dispatched by the seller, or 10, 15, 30 or 60 days after the service is completed. Net 30 or Net 60 terms are often coupled with a credit for early payment.

Examples

• The notation "net 10" indicates that full payment is expected within 10 days, For example, if "$60 net 10" is written on a bill, the buyer must pay the $60 within 10 days.
• The notation "net 15" indicates that full payment is expected within 15 days, For example, if "$100 net 15" is written on a bill, the buyer must pay the $100 within 15 days.
• The notation "net 30" indicates that full payment is expected within 30 days, For example, if "$200 net 30" is written on a bill, the buyer must pay the $200 within 30 days.
• The notation "2% 10, net 30" indicates that a 2% discount can be taken by the buyer only if payment is received in full within 10 days of the dispatch of the goods, and that full payment is expected within 30 days, For example, if "$1000 2/10 net 30" is written on a bill, the buyer can take a 2% discount ($1000 x .02 = $20) and make a payment of $980 within 10 days or pay the full $1000 within the remaining of the 30 days.
• The notation "net 60" indicates that full payment is expected within 60 days, For example, if "$5000 net 60" is written on a bill, the buyer must pay the $5000 within 60 days.
• The notation ".9% 10, net 60" indicates that a 0.9% discount can be taken by the buyer only if payment is received in full within 10 days of the dispatch of the goods, and that full payment is expected within 60 days. For example, if "$10000 .9/10 net 60" is written on a bill, the buyer can take a 0.9% discount ($10000 x .009 = $90) and make a payment of $9910 within 10 days or pay the full $10000 within the remaining of the 60 days.

Usage

Net 30 is a term that most business and municipalities (federal, state and local) use in the United States. Net 10 and Net 15 is widely used as well. Net 60 is less used because of its longer payment terms. Legally speaking Net 30 means that buyer will pay seller in full on or before the 30th calendar day (including weekends and holidays) of when the Goods were dispatched by the Seller or the Services were fully provided. Transit time is included when counting the days, i.e. a purchase in transit for 7 days before receipt has just 23 additional days until payment is due to the seller. Net 30 payment terms typically have an interest penalty for not meeting these terms and they begin accruing on the 31st day after dispatch. The same happens with Net 60, but 60 days are given for payment, interest penalties begin on the 61st day and thus a purchase in transit for 7 days has now 53 days until payment is due to the seller.

See also

• Discounts and allowances
• Net (economics)