Net 60 payment terms: what they mean, and when to offer Net 15 instead

Payment terms tell the customer how long they have to pay. Net 60 gives them 60 days. The common net terms side by side:

Our guide to Net 30 payment terms covers the most common term in detail, including the wording to put in a quote and how to ask about a customer's accounts payable process. Everything there applies to Net 60 and Net 15 too. This guide covers what changes when the number does.

In the UK, the same terms are usually written as "payment within 60 days" or "60 days from invoice", and the work of chasing late payers is called credit control.

Count 60 calendar days from the invoice date. Weekends and public holidays count unless your terms say "business days".

Say a design agency sends an invoice dated March 10 on Net 60. March has 31 days, so 21 days take it to March 31. April adds 30, which makes 51. Nine more days reach May 9. The invoice is due May 9 and overdue from May 10.

Two details change the answer:

• End of month terms. Under Net 60 EOM, the 60 days start at the end of the month the invoice is dated. The same March 10 invoice would be due May 30, three weeks later than plain Net 60. Check which one the customer means before you agree.
• Invoice date or receipt date. Some customers count from when the invoice arrived. Write "60 days from the invoice date" in your terms, and send it the day it is dated.

Put the due date itself on the invoice, not only "Net 60". Nobody in the customer's accounts payable team should have to count.

The cost of longer terms is not a fee. It is the money you are owed but do not yet have.

Say a consultancy bills one client $20,000 at the end of each month. On Net 30, each invoice is paid about a month after it is sent, so roughly one month of billing, $20,000, is waiting to be paid at any time. On Net 60, two months of invoices are waiting: about $40,000. The work and the price are the same. You are carrying an extra $20,000 for that customer, for as long as you work with them.

Payroll, rent and subcontractors are paid on their own schedule, not your customer's. If one Net 60 customer makes up a large share of your revenue, a few weeks' slip on their side can leave you short.

Longer terms also raise your days sales outstanding, even if every customer pays exactly on time. Know that before you read it as a collections problem.

Net 60 can be a reasonable trade when:

• The customer is large, pays reliably and offers steady, repeat work.
• The work is valuable enough that the wait is worth it, and you have priced it in.
• Your cash position can carry the gap without borrowing.
• The terms come with something in return.

That last point is the one most often missed. When a customer's purchasing team says "our standard terms are 60 days", you can ask for something back:

• A deposit at the start, so you are not funding the whole job.
• Staged billing, so you invoice as the work progresses rather than once at the end. Our guide to progress billing explains how to set it up.
• A higher price, or a smaller discount than you would otherwise give.
• An early payment discount such as 2/10 Net 60, which rewards them for paying sooner. Our guide to early payment discounts shows how to work out whether one is worth offering.

Wording you can use when a customer asks for Net 60:

Hi [First name],

Thanks for sending over your supplier terms.

We can work to Net 60 on this account. To make that work on our side,
we'd ask for [a deposit of Percent or Amount at the start / invoicing at
each project stage / Your alternative].

Our other terms stay as in [Quote or contract reference]. Invoices will
show the due date, and we'll send them to [Customer AP email].

Could you confirm that works, and let me know if you need anything
else for supplier setup?

Thanks,

[Your name]

Keep any current invoice on the terms already agreed. Longer terms should apply to future work, from the date you both agree them.

Net 15 is a good default when waiting a month would cost you more than the customer gains from it. Consider it when:

• The job is small. A short piece of work billed for a modest amount does not need a month's credit.
• The customer is new. With no payment history, a shorter term limits how much is at risk while you learn how they pay. A credit application form helps on larger accounts.
• You pay costs up front. If you buy materials or pay subcontractors before you invoice, Net 15 shortens the gap.
• The work repeats weekly or monthly. Frequent invoices on short terms keep any one unpaid balance small.

Net 15 only helps if the customer's process can meet it. Some accounts payable teams pay suppliers on one or two fixed days a month. If their payment run is on the 30th, a Net 15 invoice sent on the 1st will probably wait until the 30th anyway. Ask about payment runs before you agree terms, and set the invoice timing around them where you can.

If a customer pushes back, you can hold Net 15 for small jobs and offer Net 30 for larger ones, so the terms follow the size of the risk.

The longer the terms, the later problems surface. A Net 60 invoice missing a PO number can sit for two months before anyone notices, and by then the fix takes another payment run.

Two habits help on any terms:

Confirm the invoice landed early

On Net 60, do not wait 60 days to find out the invoice went to the wrong inbox. Check within the first week or two that the customer has it, it is approved, and nothing is missing. A short note is enough:

Hi [First name],

Just checking that invoice [Invoice number] for [Amount] reached the
right person and has everything your team needs. It's due on [Due date].

If a PO number or anything else is missing, let me know and I'll
resend it today.

Thanks,

[Your name]

Remind before the due date, and follow up the day after

A short reminder a few days before the due date catches invoices that were approved and then forgotten. Our payment reminder email templates have wording for it. If the invoice is not paid on time, ask when it will be. Get a date, not "soon", and follow up again if that date passes. The past due invoice email templates cover every stage after that.

Whatever terms you use, write them into your quote and your invoice in the same words. Our guide to invoice terms and conditions has a terms block you can copy.