Accounting KetchupAccountingKetchup
Get My Price →

Net Terms

Net terms (like Net 30, Net 60) specify how many days a customer has to pay an invoice after it's issued. Net 30 means payment is due within 30 days.

Net Terms Definition

Net terms define the payment deadline on an invoice. "Net 30" means the full amount is due 30 days from the invoice date. "Net 60" gives 60 days. Some terms include early payment discounts, like "2/10 Net 30" — take 2% off if you pay within 10 days, otherwise full amount due in 30.

Common Net Terms

  • Due on receipt — pay immediately
  • Net 15 — due in 15 days
  • Net 30 — due in 30 days (most common)
  • Net 60 — due in 60 days
  • Net 90 — due in 90 days (common in construction and government)
  • 2/10 Net 30 — 2% discount if paid in 10 days, full amount due in 30

    • Choosing the Right Net Terms

  • Shorter terms (Net 15, Due on receipt) improve your cash flow but may deter some customers
  • Longer terms (Net 60, Net 90) are competitive but strain your working capital
  • Match your terms to your industry — check what competitors offer

    • How Net Terms Work in QuickBooks

    Set default payment terms in Settings → Account and Settings → Sales. You can also set terms per customer. QuickBooks uses the terms to calculate due dates on invoices and track aging in the A/R Aging report.

    FAQ

    Q: What if a customer doesn't pay by the net terms date?

    A: Follow up with a reminder. If consistently late, consider requiring prepayment, shortening terms, or adding late fees (check your state's rules on late fees first).

    Related Terms

  • Accounts Receivable
  • Invoice
  • Cash Flow
  • Working Capital

    • > Need help making sense of your books? Ketchup cleans up your QuickBooks in 3–7 business days — so your numbers actually make sense. Get your price →

    Related Terms

    Posting

    Posting is the process of transferring journal entries from the general journal to the individual accounts in the general ledger. It's the step that takes a recorded transaction and distributes it to the correct accounts — so your accounts receivable, cash, revenue, and other ledger accounts all ref

    Profit and Loss Statement

    A profit and loss statement (P&L), also called an income statement, summarizes your business's revenues, costs, and expenses over a specific period. The bottom line shows whether you made a profit (revenue exceeded expenses) or took a loss (expenses exceeded revenue). It's one of the three core fina

    Direct Cost

    Direct costs are expenses that can be specifically traced to a particular product, service, project, or customer. They vary directly with production volume or activity level — more sales means proportionally more direct costs. Common direct costs include raw materials, direct labor, and subcontracto

    Cash Flow Statement

    A cash flow statement is one of the three core financial statements (along with the P&L and balance sheet). It shows how cash moved through your business over a period — where it came from and where it went. It's organized into three sections: operating activities, investing activities, and financin

    Need these terms applied to your books?

    Accounting Ketchup catches up your QuickBooks so the glossary becomes your reality. Flat rate.

    Get My Price →