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Net 60 Payment Terms

What does net 60 payment terms mean?

Net 60 means the customer has a 60-day period to pay for their goods or services before the bill is past due. It is best practice for a business to get net terms in writing when signing a contract with new clients, and include language on your invoicing that explains when payment is due (and what happens with late payments).

Frequently Asked Questions

  • Is net 60 payment terms normal?

    In comparison to net 30 and net 90 payment options, net 60 payments are fairly common, though it’s usually larger businesses who can afford to have longer payment terms. It’s important, however, to clearly define the due date for a net 60 payment; companies might count the number of days from when an invoice was created, completed, emailed, or postmarked by mail. Whatever the case may be, those details should be shared upfront so everyone agrees on the invoice date and has the same expectations for payment method.

  • Does net 60 include weekends?

    Net 60 invoice payment terms signify the buyer will complete a full payment for the amount due on (or before) the 60th calendar day, factoring in weekends and public holidays. Rather than assuming new customers understand these conditions, be sure the contract your company signs makes these stipulations (like late fees or interest rates) very clear. 

  • Why do a majority of companies pay net 60?

    If you're a small business owner, it can be tempting to label your invoices ‘due on receipt’ since you want to keep your cashflow in motion — especially if you have significant expenses you need to cover in the short-term. Still, a majority of smaller businesses have found it beneficial to offer more generous billing terms (i.e. net 60), so customers are more willing to work with you. 

    This breathing room within the invoice payment gives buyers a chance to get their funds together to pay the full amount, and likely builds greater customer satisfaction overall. In addition, giving 60 days’ notice provides a clear time after which you can request payment more aggressively (knowing you’ve communicated how long the client has to pay the invoice amount).

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